The BVP pensions fund, based in Vienna currently invests by far the greatest part of its equities investment outside Austria, given the poor performance of the domestic market, relative to its neighbours.

The director of the BVP pension fund, Ferdinand Kernbauer, explains that while the fund has asset allocations catering to a number of different communities, dependent on their respective liabilities, the total equity holding is 25%.

The fund has AS4bn ($335m) worth of assets under management, but only 6% of this is invested in Austrian equity.

The main reason Kernbauer gives for wariness of the domestic market is the high volatility, and that this is aggravated by the poor earnings performance compared to elsewhere in Europe.

Kernbauer assessing the domestic market, says: I think the market is lower than the beginning of this year. We are now 10% under the highest level. It is not in a very stable condition.”

He partly blames the unstable environment in Europe as a whole. “The Austrian market and Austrian companies have been affected by the general economic downturn in Europe.”

But he does believe that the prospects are for an improvement in line with the signs of an overall pick up in the European economy.

He suggests that one of the best stocks in Austria is OMV the oil distributor, which is one of the dominant stocks in the Austrian market.

He does not see any major market influence for pension fund money as yet adding: “Pension funds are a small part of the institutional funds in Austria. Funds have assets totalling around AS35bn but they are not a big player in the Austrian market.”

He says that pension funds are becoming more pro-equity which is mainly the result of lower returns on Austrian bonds which currently give 5.8% for 10 year bonds rather than a major cultural shift.