Back to black for 100+ big corporate pension funds

‘Around 100’ of Japan’s ‘major’ corporate pension funds enjoyed returns of 3.5% in the year ending 31 March, according to actuarial consultants Rating and Investment Information, a subsidiary of the Nikkei newspaper which reported the results. The funds reviewed had assets totaling 9 trillion yen and were most probably R&I clients.

This performance is the first positive outcome in two years and compares with a loss of 0.7% last time. The number was calculated by using actual figures for the first 11 months of the year then adding estimates for March based on the funds’ asset allocation. It is significantly higher than the 2% which had earlier been expected.

With the Nikkei Stock Average rising 13% during the term and Dow Jones Industrial Index by 17%, yields on both domestic and foreign stock were positive even though a rising yen ate into the overseas gains.

The currency effect also diminished the value of overseas bond holdings and prices for local debt paper declined in line with the Bank of Japan’s monetary easing policies.

The Nikkei report notes that a survey by Willis Towers Watson, another actuarial firm and an R&I competitor in Japan, which covered 120 pension funds, also put their gain for year at 3.5% but pegged last year’s outturn at -0.6%.

© 2017 Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes big commitments of money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to and a link provided to the original text on that site.

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