The Government Pension Investment Fund (GPIF) of Japan is one of the largest and most influential pension funds in the world, with assets totaling ¥246 trillion (approximately $1.53 trillion) as of March 31, 2024. The GPIF plays a crucial role in ensuring the sustainability of Japan’s public pension system by strategically managing its vast portfolio to balance risk and return.

By March 2024, the composition of the GPIF’s portfolio had diversified substantially. Japanese bonds now make up less than 30% of the total assets. In contrast, the allocation to Japanese stocks has increased from less than 10% in 2014 to approximately 20% in 2024. This change reflects a strategic pivot towards higher-yielding investments to improve overall returns. Simultaneously, the GPIF has significantly increased its exposure to foreign assets. Foreign bonds and stocks, which had minimal representation in the portfolio in 2014, now constitute around 20% and above 30% of the assets, respectively. This shift underscores the GPIF’s efforts to diversify its holdings and mitigate risks associated with the domestic economy.

As of March 2024, the GPIF’s total assets stand at ¥246 trillion (approximately $1.53 trillion). The fund’s current asset distribution reflects a balanced approach between domestic and foreign investments.

Half of the GPIF’s total assets are held in foreign stocks and bonds. This significant allocation to foreign assets, primarily denominated in USD, is aimed at capturing higher growth opportunities and spreading risk across different markets. The fund employs various hedging strategies to manage currency risk and enhance returns from its international investments.