The world’s largest pension Fund lost more than $50 billion on Brexit


Government pension investment Fund of Japan, the world’s largest pension Fund, has completed the first quarter of the fiscal year with a loss of $52 billion, evidenced by his statements.

Total assets of the Fund for the quarter ended June 30, declined by 3.88% to of 129.7 trillion yen ($1.3 trillion), it follows from the statements. The Fund for the first time since 2008 shows the decrease of the portfolio for the second consecutive quarter in the previous quarter, a decline of 3.52%.

The negative financial result of the Foundation explains, in particular, with unexpected decision of the UK to secede from the Union. “The results of the referendum came as a surprise to the market. And the data on unemployment in the US in may was much worse than predicted. <…> These factors have led to a significant strengthening of the yen and falling markets”, — stated in the message of the President of the Fund, Norihiro Takahashi.

The results of the referendum in the UK was announced on June 24 — less than a week before the end of the quarter on June 30. Investors, wary over the Outlook for the global economy, began to buy up safe assets, which traditionally include the Japanese yen. The value of the yen to the dollar sharply jumped up, causing foreign assets of the Japanese pension Fund fell significantly.

The share of foreign assets in the total portfolio of the Fund (34.3%), where 21.3% of a — shares, the 13% government bonds United States and Germany. Most of the losses occurred in stock — 7,76%, or 2.4 trillion yen ($23.3 billion). Losses from investments in bonds amounted to 8.2%, or 1.5 trillion yen ($14.6 billion). While Japanese government bonds has brought the Fund an income of 1.9%, or 938,3 billion yen ($9 billion).

As the Financial Times, the quarterly loss in fact, nullify all the progress that the Fund has reached as a result of the revision of the strategy in October 2014, decided to concentrate on investments in stocks.

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