Japan. The World’s Biggest Pension Fund Needs U.S. Bull Run to Last
The world’s biggest pension fund, always a giant within its home country of Japan, has been expanding its reach in other stock markets — and becoming increasingly dependent on a U.S. bull run that’s poised to be the longest in history.
The $1.4 trillion Government Pension Investment Fund has doubled its foreign shares since a strategy overhaul in 2014, and is now a top 10 holder in more than 260 companies outside Japan, according to a Bloomberg analysis of GPIF’s individual equity positions after they were released last month.
Nowhere has its stock buying been greater than in the U.S., whose shares account for more than half of the fund’s overseas equity holdings. As a predominantly passive investor, GPIF’s fortunes have become particularly tied to the largest U.S. stocks at a time when that country’s bull market is in its 10th year. While that strategy has been working, analysts warn that the purple patch for the fund’s returns may not continue.
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