GPIF: US Treasury composition reduced to 35%: Benchmark compliance

GPIF: US Treasury composition reduced to 35%: Benchmark compliance

-Benchmark emphasis is clear-

August 2, 2021

Japan GPIF:

Composition of US Treasuries:

At the end of March this year, the composition ratio of US Treasuries fell to 35%.

It decreased by 12 percentage points from 47.4% a year ago.

The rate of decline is the largest since FY2014.

Composition ratio of European government bonds:

European government bonds such as France, Italy and Germany have increased their composition ratio in place of US Treasuries.

The share of government bonds in France, Italy, Germany and the UK has risen by at least 1.7 percentage points.

The purchase price of these European government bonds amounted to 5,720 billion yen.

Focus on benchmarks:

The composition ratio of US Treasuries in GPIF’s foreign bonds has fallen to a record level.

This is because the allocation of funds in line with the market investment index (benchmark) has been strengthened.

Mitsubishi UFJ Morgan Stanley
Keisuke Tsuruta Bond Strategist

GPIF is

In 2018 and 2019, there was a lot of investment in US Treasuries, which was overweight.

Clarified “Policies to avoid deviation from benchmarks from FY2020”.

Bloomberg

Russia and China: Foreign exchange reserves, US dollar dependence reduced from 87% to 59%

Russia:

In July 2021, Russia completed a dollar sale operation in a month.

Government fund “National Welfare Fund”:

The “National Welfare Fund” has reduced the US dollar, which accounted for 35%, to zero.

Increased Chinese yuan and euro from 15% to 30% and 35% to 40%, respectively.

China:

The dollar dependence of foreign currency reserves has been reduced from 80% to 60% in 20 years.

Imports of Iranian crude oil facing U.S. sanctions were “almost denominated in RMB in April 2020” (Chinese Communist Party official)

Nihon Keizai Shimbun

https://www.nikkei.com/article/DGXZQOGN0441Y0U1A700C2000000/