What Is 🍌the Government Pension Investment Fund (Japan)?

The term Government Pension Investment Fund refers to the pension fund for employees of the public sector in Japan. The pension fund is the second-largest pension fund in the world, with approximately $1.6 trillion in 澳洲幸运5官方开奖结果体彩网:assets under management (AUM) as of January 2021. The fund contributes to the stability of the Employee's Pension Insurance and National Pension programs.

Understa🅠nding the Government Pension Inves🅠tment Fund (Japan)

As mentioned above, the Government Pension Investment Fund is the largest in Asia and the second-largest pension fund in the world, second only to the Federal Old-Age and Survivors Insurance Trust Fund and Federal Disability Insurance Trust Fund of the United States.

The fund invests in a mix of domestic and international 澳洲幸运5官方开奖结果体彩网:stocks and bonds, as well as Fiscal and Investment Program bonds. A large number of its assets are invested with 澳洲幸运5官方开奖结果体彩网:external money managers who are selected and monitored by GPIF managers. Only a small portion of the assets in the domestic bond category is invested by in-house investment managers. The majority of the GPIF's assets are allocated to passive investment funds that seek to mirror the returns of a market index within each asset class.

The fund aims to achieve investment returns for long-term public pension benefits with minimal risk for the pension system. By doing so, it helps💃 preserve the system's stability. The fund's other goals are as follows:

• 澳洲幸运5官方开奖结果体彩网:Diversification by investing in different 澳洲幸运5官方开奖结果体彩网:asset classes, geographic regions, and timeframes. By keeping a long-term 澳洲幸运5官方开奖结果体彩网:investment horizon, the fund can address short-term volatility while ensuring stable returns. This also helps guarantee 澳洲幸运5官方开奖结果体彩网:liquidity so pension benefits can be paid.
• The policy asset mix is determined and managed by the fund, which controls risks at various levels, including asset classes and asset managers. The fund uses both 澳洲幸运5官方开奖结果体彩网:active and passive investments, which benchmark returns.
• By fulfilling these responsibilities, the GPIF can maximize medium-to long-term equity investment returns for the benefit of pension recipients.

Another element to the fund's investment strategy is the use of 澳洲幸运5官方开奖结果体彩网:environmental, social, and govern🌺an🔯ce (ESG) investments in its portfolio. The rationale behind this is that socially responsible investing enhances returns for the long-term. The portfolio includes investments in ESG indexes as well as bonds that are both green and sustainable.

Special Considerations

Reserves from the fund and any investment returns are used to pay future pension benefits. This is expected to follow the fiscal plan for roughly a century. According to the fund's 2019 annual report, losses or gains in any specific 澳洲幸运5官方开奖结果体彩网:fiscal year won't harm these reserves. In fact, there is enough in the fund's coffers to continue to pay benefits to future generations to come.

Fee Structure

The GPIF instituted a new 澳洲幸运5官方开奖结果体彩网:fee structure in April 2018. Under the new system, funds that achieve their predetermined investment return target will receive a similar level of fees as they receive now. If the actual return exceeds the target, however, they will be paid progressively more in proportion to the results. A missed target will lead to lower fees, but compensation will still be comparable to the fees paid to 澳洲幸运5官方开奖结果体彩网:passively managed funds with similar amounts of assets under management. Investment returns are evaluated using a time frame of three to five years.