The €5.5bn Austrian multi-employer pension fund APK was the best performer in the mid-risk segment of the Austrian life-cycle model over three, five and 10 years, according to analysis by Mercer.
Mercer Austria tracked the performance of all five of the country’s multi-employer Pensionskassen over the three time periods.
The Pensionskassen offer funds in five different risk levels within the Austrian life-cycle model, ranging from “defensive” to “conservative”, “balanced”, “active” and “dynamic” – all defined by their equity exposures.
For the “conservative” segment (with an equity quota between 16% and 24%) APK came first over the three-year, five-year and 10-year periods.
In the outlier categories with the highest equity quota of over 40% – the “dynamic” category – and the lowest of under 16% (“defensive”), the largest Austrian pension fund, the VBV, was the best performer over all periods but one. The Bonus Pensionskasse performed better in the “defensive” category over 10 years.
The best performing funds in the “active” category (with an equity quota between 32% and 40%) returned more than 4% a year over all three time periods.
This was “more than satisfactory”, according to Michaela Plank, expert for retirement solutions at Mercer Austria, particularly as the 10-year period included the 2008 market crash.
“With good risk management such market crashes can balance themselves out over time,” she added.
The analysis of the 10-year period showed quite similar results for all risk-categories regardless of equity quota.
There was a spread of just 25 basis points between the average return of “defensive” portfolios (3.24% a year) and that of “dynamic” portfolios (3.49% a year).
In other time periods the differences in returns were much greater with spreads of 160bps over three years and 285bps over five years.
Mercer noted such long-term analysis “takes into account the long-term character of occupational pension provision”.