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What's going on?

The worlds biggest pension fund Japans Government Pension Investment Fund was none too pleased to have suffered its worst-ever loss in the first quarter, but at least its started to clean up its mess

What does this mean?

Like almost everyone else, Japanese investors were wrongfooted by the coronavirus outbreak. But the countrys government pension fund was so out of step that it lost a grand total of $165 billion pretty much everything itd made throughout 2019.


Most of the blame rests on the shoulders of the foreign and domestic stocks that make up roughly half the pension funds investment portfolio. Bonds, which made up the other half, did much better: the countrys own lost just $2 billion in the first quarter, while international bonds made $1 billion perhaps thanks to the global investors who flocked to their relative safety.

Why should I care?

For you personally: Were doomed! Just kidding.


Investors are right to be worried by news that the fund lost dramatic sums. Pensioners rely on regular income from funds like this one, after all and even if youre some way away from retirement yourself, youre looking at the same potential difficulties your own future pension payer could hit one day. But before you start hiding your cash under the bed, heres the good news: a little bit of portfolio rebalancing and the Japanese government pension fund has already bounced back which is why you might want to do the same to your own investments.



For markets: You win some, you lose some.


Japans Government Pension Investment Fund has been split more evenly between local and international stocks and bonds since April, which should help it avoid another embarrassing mishap if things take a turn for the worse. Of course, it also meant the fund didnt benefit as much from the stock market recovery last quarter as it wouldve if itd had a greater proportion of risky assets.

Originally posted as part of the Finimize daily email.

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