Investment results for 2Q of fiscal 2018(update report)

Government Pension Investment Fund (GPIF) manages the public pension fund in the long term and its investment results
should be assessed in the same manner. In addition to the annual report, which is legally required, GPIF publishes thequarterly update report to enhance the transparency to the public.
Please note that the results include the change of the fair market value and that the results tend to fluctuate in accordancewith the market movement.

Rate of investment return(Investment returns(￥billion))2018 2Q

From fiscal 2001
to 2Q of fiscal 2018

＋3.42％(Not annualized)(＋5,414.3 (Interest and dividendincome 609.3))＋3.33％(Annualized)(＋71,478.4 (Interest and dividendincome 32,473.2))

165,610.4(End of 2Q of fiscal 2018)

Total assets(￥billion)
40%¥billion
80,000

Cumulative returns and quarterly rate of return（FY2001-2018 2Q）

35%

Rate of return＋3.33％（annual rate）

30%

Returns＋¥71,478.4 billion（cumulative returns）+71,478.4
70,00060,00025%

50,00020%

40,00015%

30,00010%

20,0005%

10,0000%

0-5%-10,000
Cumulative returns-10%

FY2001

FY2002

FY2003

FY2004

FY2005

FY2006

FY2007

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015

Quarterly rate of return
FY2016FY2017FY2018-20,000

Note1: The GPIF’s portfolio consists of the funds invested in the markets (hereinafter “market investment,” which is marked to market) and FILP bonds (Fiscal Investment and Loan Program bonds), which are held to maturity andNote0: valued at amortized costs.
Note2: Return figures are the average of returns of market investment and FILP bonds weighted with investment principal, and are gross of fees.
Note3: Periodic rate of return and periodic investment returns are compared from the previous quarter.
Note4: Rate of investment return (annualized) is calculated as a geometric mean of the annual rate of return from FY2001 to this quarter.
Note5: Cumulative returns indicate the total investment returns so far (from FY2001 to this quarter).
Note6: As these figures are preliminary, they may be subject to change in the Annual Report etc.

-1-Reference index: 2Q of fiscal 2018○Market Information
2018/3
Domesticbonds

2018/62018/7

2018/8

2018/9(%)

0.05

0.03

0.05

0.11

0.13

(points)

1,716.30

1,730.89

1,753.29

1,735.35

1,817.25(\)

JGB 10-year yield

Domestic
equities

TOPIX

21,454.30

22,304.51

22,553.72

22,865.15

24,120.04

Foreignbonds

U.S. Treasury 10-year yield (%)

2.74

2.86

2.96

2.86

3.06

German Government Bond 10-year yield (%)

0.50

0.31

0.44

0.33

0.47

Nikkei225($)

24,103.11

24,271.41

25,415.19

25,964.82

26,458.31

DAX(points)

12,096.73

12,306.00

12,805.50

12,364.06

12,246.73

SSEC(points)

3,168.902,847.42

2,876.40

2,725.25

2,821.35\/$

106.35110.77111.94110.89113.59\/€130.79129.32130.98129.01131.93

NY Dow

Foreignequities

FX○Benchmarks
2018 2Q

Domestic bonds2018 1Q-2Q-0.80% -0.67%

Composite Benchmark-0.96%NOMURA-BPI non-ABS

Domestic equities
TOPIX (incl. dividends)
Foreign bonds-0.77%

5.86% 6.97%

FTSE World Government Bond Index (not incl. JPY, no hedge/JPY basis)
cf. FTSE World Government Bond Index (not incl. JPY, Local currency basis)

Foreign equities
MSCI ACWI (not incl. JPY, JPY basis, incl. dividends, after taking into account our dividend tax factors)
cf. MSCI ACWI (not incl. JPY, Local currency basis, incl. dividends, after taking into account our dividend tax factors)-2-

1.40% 2.17%-0.85%-1.14%

7.08% 12.60%
4.64%

7.76%

Investment assets and portfolio allocation（Reserve Funds managed by GPIF and the Pension Special Account）
End of September 2018
Market value(￥billion)

inside： policy asset mix (figures in parentheses
indicate deviation limits)outside：at the end of September 2018

Allocation ofPension Reserve

Domestic bonds

Domestic bonds

42,914.1

25.26%

Foreign equities

Domestic equities

43,564.6

25.65%

25.70%¥43,660.4 billion

Foreign bonds

25,156.6

14.81%

Foreign equities

43,660.4

25.70%

Short-term assets

14,579.2

8.58%

Total

169,874.8

100.00%

25%
(±8%)

15%
(±4%)
Foreign bonds
14.81%¥25,156.6 billion

25.26%¥42,914.1 billion

35%(±10%)

25%(±9%)

Short-term assets

8.58%¥14,579.2 billion
Domestic equities
25.65%¥43,564.6 billion

Note１: Policy Asset Mix is as follows: Domestic bonds 35% (±10%), Domestic equities 25% (±9%), Foreign bonds 15% (±4%), Foreign equities 25% (±8%). Based on the current market trends,deviation limits for domestic bonds are flexibly managed as an interim measure. Specifically, short-term assets can be added to domestic bonds within the range allocated for domestic bonds.
Note２: The percentage of the alternative investments ：0.18% (within maximum 5% of total portfolio)-3-Investment results for 2Q of fiscal 2018
≪Total investments（market investments＋FILP bonds）≫
2017

2018

Fiscal year
1Q

2Q

3Q

4Q

Total

1Q

2Q

3Q

4Q

Total

Rate of investment return (%)

3.54

2.97

3.92

-3.49

6.90

1.68

3.42

0.00

0.00

5.13

Investment returns (￥billion)

5,115.3

4,451.7

6,054.9-5,540.8

10,081.0

2,622.7

5,414.3

0.0

0.0

8,037.0

Total assets (￥billion)

149,198.7

156,817.7

162,672.3

156,383.2

156,383.2

158,580.0

165,610.4

0.0

0.0

165,610.4≪Reference≫（Market investments）（FILP bonds）
2018

Fiscal year

2018

2017
1Q

Fiscal year

2Q

Modified total return (%)（Time-weighted return）

6.94

1.68

3.43

(6.99)(1.68)(3.41)

Investment returns (￥billion)

10,057.8

2,618.4

Total assets (￥billion)

155,486.8

157,684.2

2017
1Q

2Q

Rate of investment return (%)

1.82

0.48

0.48

5,410.0

Investment returns (￥billion)

23.2

4.3

4.3

164,714.1

Total assets (￥billion)

896.4

895.8

896.3

Note1: Fiscal year ends on March 31.
Note2: FILP bonds; Fiscal Investment and Loan Program bonds.

-4-Rate of investment return≪Total investments≫
Fiscal year

(unit：%)
2018

2017

Rate of investment return

1Q

6.90

2Q

3Q

3.42 ‐

1.68

4Q

Total

‐

5.13

≪Reference≫（Market investments）
Fiscal year

(unit : %)
2018

2017

Modified total return

1Q

6.94

2Q

3Q

3.43 ‐

1.68

4Q

Total

‐

5.15
(unit : %)Fiscal year

2018

2017

1Q

2Q

3Q

4Q

Total

Time-weighted return

6.99

1.68

3.41 ‐‐

5.15

Domestic bonds

0.80

0.14

-0.79 ‐‐

-0.65

Domestic equities

15.66

1.03

5.89 ‐‐

6.98

Foreign bonds

3.71

0.56

1.79 ‐‐

2.35

Foreign equities

10.15

5.17

7.07 ‐‐

12.61

Short-term assets

-0.00

0.00

-0.00 ‐‐

0.00

（FILP bonds）
Fiscal year
Rate of investment return(unit：%)
2018

2017

1Q

1.82

2Q

0.48

3Q

0.48 ‐

-5-4Q

‐

Total

0.96

Investment returns≪Total investments≫
Fiscal year
Investment returns(unit：￥billion)
2018

2017

1Q

10,081.0

2Q

2,622.7

3Q

5,414.3

4Q

0.0

0.0

Total

8,037.0≪Reference≫（Market investments）
Fiscal year
Investment returns(unit：￥billion)
2018

2017

1Q

2Q

3Q

4Q

Total

10,057.8

2,618.4

5,410.0

0.0

0.0

8,028.5

Domestic bonds

362.2

61.4

-336.50.0

0.0-275.1

Domestic equities

5,507.6419.9

2,423.00.0

0.0

2,842.9

Foreign bonds

674.0

134.0

441.2

0.0

0.0

575.3

Foreign equities

3,514.0

2,003.0

2,882.3

0.0

0.0

4,885.3

Short-term assets

-0.0

0.1

-0.1

0.0

0.0

0.0

（FILP bonds）
Fiscal year
Investment returns(unit：￥billion)
2018

2017

1Q

23.2

2Q

4.3

3Q

4.3

-6-

4Q

0.0

0.0

Total

8.6

Historical data on investment returns
Cumulative returns and quarterly rate of return（FY2001-2018 2Q）¥billion
80,00040%+71,478.4

35%

Rate of return＋3.33％（annual rate）

30%

Returns＋¥71,478.4 billion（cumulative returns）

70,00060,00025%

50,00020%

40,00015%

30,00010%

20,0005%

10,0000%

0-5%-10,000
Cumulative returns-10%

FY2001

FY2002

FY2003

FY2004

FY2005

FY2006

FY2007

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014

Quarterly rate of return

FY2015FY2016FY2017FY2018-20,000

FY2018 FY2006-2018 FY2001-2018
Apr to Sep
2Q
2Q

FY2001

FY2002

FY2003

FY2004

FY2005

FY2006

FY2007

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017

Investment returns(￥billion)-587.4-2,453.0

4,891.6

2,612.7

8,961.9

3,944.5-5,517.8-9,348.1

9,185.0-299.92,609.2

11,222.2

10,220.7

15,292.2-5,309.8

7,936.3

10,081.0

8,037.0

58,052.6

71,478.4

Rate of investment return-1.80%-5.36%

8.40%

3.39%

9.88%

3.70%

-4.59%-7.57%

7.91%-0.25%

2.32%

10.23%

8.64%

12.27%-3.81%

5.86%

6.90%

5.13%

3.57%

3.33%

Note: Fiscal year ends on March 31.

-7-