Assets under management (AUM) of Austrian provident funds (Vorsorgekassen) increased by 5.3% in the first half of the year to €17.47bn, according to a quarterly report published today by the Financial Market Authority (FMA).
In the second quarter of this year provident funds’ AUM rose by €448m or 2.63 %. The funds returned 1.61% in H1 this year, and 0.96 % in the second quarter, recording an annualised investment return of 1.41% over the last 10 years, accoridng to the authority.
The pension funds recorded a positive return of between 1.37% and 5.74% between 2019 to 2021, while in the period 2018-2022 returns were negative, of -1.98% and -7.73%, FMA added.
Provident funds invest the largest share of their assets in bonds (63.83%), while deposits make up 8.22% of the assets, with equities at 13.05%, real estate at 6.65%, loans at 4.33%, and other assets at 3.92%, it added.
Compared to the previous quarter, in Q2 this year the share of bond investments in particular increased by 2.12 percentage points, while the share of deposits with credit institutions fell by 1.78 percentage points.
Allocations to real estate (-0.21%) and loans (-0.17%) decreased, while equity investments went slightly up by 0.09%, according to the report.
Over the last five years, the allocation to real estate and other assets has grown in provident funds’ portfolios, while the allocation to bonds decreased, the report added.
Equity investments have also increased over the past five years, but fell to a level of less than 10% in the third quarter of last year. In the first two quarters of 2023, equity allocations rose again, from 10.43% in Q4 2022 to 13.05% at the end of H1 this year.
The number of members in provident funds entitled to pension benefits totalled around 10.68 million, up by 87,000 or 0.81 % quarter-on-quarter, including those who are members of different Vorsorgekassen. Beneficiaries hold pension assets in three accounts of €1,636 on average.