Austria’s APK Pensionskasse has tactically increased its allocation to alternatives by 3%, at the expense of equities and bonds, according to the scheme’s 2022 financial statement.

Alternatives now make up 12% of APK’s investment portfolio.

The pension fund cut investments to European equities by two percentage points to 8% last year, and to “other bonds” by four percentage points to 35% of total assets, the statement added.

Its allocation to non-euro equities remained unchanged at 23%, with the share of government bonds and real estate slightly increasing from 7% to 8%, and from 6% to 7%, respectively. It also reduced money market investments from 7% to 6%.

APK returned -10.6% in 2022, below the average recorded by multi-employer pension funds in Austria (-9.5%). It returned 1.8% over a five-year period, 3.34% over a 10-year period, and 2.9% over a 15-year period.

The pension fund expects better returns this year as bonds are trading at significantly more attractive valuation levels, the statement revealed.

APK’s AUM fell due to capital market volatility to €5.33bn last year, from €5.95bn in 2021, in line with the overall trend – AUM of multi-employer pension funds in Austria decreased last year to €22.2bn, from €24.7bn the prior year.

The scheme’s share of the total market of multi-employer pension funds stood at 24 percentage points, on par with the previous year.

The number of beneficiaries increased by 3.7% to approximately 155,000. Contributions also went up €279.9m, from €218.8m in 2021. The pension fund paid pension benefits last year amounting to €227.3m, up from €214.5m in 2021.

APK Vorsorgekasse – APK’s provident fund – also recorded an increase in contributions by 12.3% year-on-year in 2022 to €157.1m.

Other provident funds transferred assets to APK Vorsorgekasse last year amounting to €42.6m, with transfers from major customers of €8.5m. The payouts of pension benefits increased from by 15.6%, from €42.9m in 2021 to € 49.6m last year.

APK Versicherung, offering savings plans (unit-linked and private pension insurance), saw its AUM fall by 14.7%, from €87.1m in 2021 to €74.3m in 2022, according to the statement.

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