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Spanish pension funds return nearly 11% on average

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Spain’s occupational pension funds have made average returns of 10.61% for the 12 months to end-March 2015, according to the country’s Investment and Pension Fund Association (INVERCO).

The results are a marked improvement on the 7.14% returns for calendar year 2014, and 7.2% for the 12 months to 31 March 2014. 

Average annualised returns for the three years to 31 March 2015 are 8.24%, and for the five years to that date, 5.8%.

Total assets under management for the occupational sector rose to €35.6bn, up by 7.3% during the previous 12 months and also an increase on the €34.2bn at end-December 2014.

The number of participants remains stable at just over 2m.

Assets for individual pension plans also increased over the first three months of the year, from €64.1bn at end-2014 to €67.8bn at end-March 2015.

For the first time ever, total pension assets in Spain have surpassed the €100bn mark.

According to INVERCO, for pension funds as a whole, there has been a slight shift towards non-domestic investments, both in fixed income and equities.

Domestic investments still make up the lion’s share of assets, at 62.7% of portfolios, but this is a decrease from 65.2% three months ago.

Non-domestic holdings have risen from 17.4% of assets at end-2014 to 20.5% at end-March 2015.

There has also been a slight shift from fixed income to equities.

Overall, 57.7% is now invested in fixed income, compared with 22.4% in equities (9% in Spanish and 13.4% in non-domestic shares).

This compares with 59.8% in fixed income and 20.1% in equities (8.6% Spanish, 11.5% non-domestic) at end-2014.

The biggest single component of pension fund portfolios – 33% – is still invested in Spanish government bonds, although this has fallen from its 35.3% share as at end-December 2014.

A further 17.6% is invested in Spanish corporate bonds, again a slight decrease from 18.6% three months’ previous.

Finally, ‘other’ assets have risen slightly, to 9.4% of portfolios, with a slight decline in cash holdings to 7.4%.

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