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While Japan’s government pension fund, the world’s largest, posted losses, there were a number of global businesses that posted similar losses.
As the global economy continues to struggle for resilience, the world’s largest pension fund, the Japanese Government Pension Investment Fund (GPIF) has posted another quarter of losses as announced today. According to a report from CNBC, GPIF reported a 0.97% loss on its investment in the quarter ending December 31, 2022.
The loss, which had a monetary value of 1.85 trillion yen ($14.3 billion) came in the IMF’s fourth straight decline, the first in about 20 years. According to the IMF, the big losses it took were on its foreign bonds which fell 5.3% for the quarter. Domestic bonds returned a modest 1.7% loss in the same period.
Not all of its units ended in the red as its portfolio of domestic stocks registered a 3.2% increase. This appreciation was not matched by a slight decrease in foreign stock portfolios.
The global economy has been under intense pressure since early last year. This huge economic shock occurred after the era of the COVID-19 pandemic. This was then exacerbated by the outbreak of a regional war between Russia and Ukraine. This war not only precipitated an energy crisis but also fueled global tensions in the supply chain.
As a member of the G7, Japan is at the forefront of the impact of these global economic pressures. This explains one of the reasons why the GPIF is currently facing financial backlash.
Based on its most recent quarterly loss, GPIF’s total loss for the first three quarters of the fiscal year now stands at 3.71%, or 7.32 trillion yen. Amid a wider attack on the company, its cumulative Assets Under Management (AUM) is now at 189.9 trillion yen.
Disadvantages of Japanese Pension Funds: A Mixed Global Reality
While Japan’s government pension fund, the world’s largest, posted losses, there were a number of global businesses that posted similar losses. American multinational technology giant apple company (NASDAQ: AAPL) reported total revenue of $117.15 billion for the prior quarter, a paltry figure compared to estimates of $121.10 billion, down 5.49% consensus year-over-year from Refinitiv.
The company takes batteries around the world with a number of pension funds reeling from losses from bad investments. In particular, the losses incurred by risky bets in the digital currency ecosystem after the bankruptcy have made pension funds reassess their investment strategies.
Canada’s largest pension fund, CPP Investments (CPPI) has left asserted boldly it will no longer make bets in the crypto world. For no apparent reason, many keen observers could understand the decision.
With the GPIF taking a hit from rising interest rates like those instituted by the US Federal Reserve last year, the IMF may also benefit from the recent dovish run.
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Benjamin Godfrey is a blockchain enthusiast and journalist who enjoys writing about real-life applications of blockchain technology and innovation to drive general acceptance and worldwide integration of new technologies. His desire to educate people about cryptocurrencies inspires his contributions to well-known blockchain-based media and websites. Benjamin Godfrey is a sports and agriculture lover.
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