GPIF is simply too big to be able to invest in only a limited set of firms. It owns about 7 percent of the Japanese equity market and roughly 1 percent of the world’s, and it is also a huge investor in the bond markets. This means that the fund is what is known as a “universal investor”—an investor with so much money to invest that it is effectively forced to hold stock in every available firm.40 Indeed 90 percent of GPIF’s Japanese equity portfolio and 86 percent of its foreign equity portfolio are invested in “passive funds”—funds that hold every available stock in a particular class and
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