Japan’s second-largest pension fund has said it expects to post the best returns since 2001 thanks to the recovery in the global stock market and seeks to develop sustainable investing.
Yields likely exceeded 20% in the year ended March, said Shigemune Sato, general manager of the Pension Fund Association’s fund management department for local government officials. The fund, known as Chikyoren, tracks the portfolio of Japan’s Government Pension Investment Fund, the world’s largest pension fund, and is expected to report its results on July 2.
Chikyoren, which manages money for public entities including regional officials, teachers and the police, has 27 trillion yen ($ 247 billion) in assets under management. With half of the portfolio tracking global and domestic equities, the fund saw returns rise as risky assets around the world rebounded to record highs thanks to loose monetary policy and fiscal stimulus.
He oversees three funds and uses the returns from only one – the Employee Retirement Insurance Benefit Adjustment Fund – to show how well his fiscal year has performed after taking into account structural changes related to the integration of pension plans. retirement in 2015, Sato said.
The fund also plans to expand its environmental, social and governance investments to include foreign stocks and bonds, Sato said. At the end of March, the pension fund had around 912 billion yen exposure to ESG, or about 14% of its Japanese equity portfolio, Sato said, said Chikyoren would consider also to join the working group on climate-related financial disclosures. starting this year.