CZECH REPUBLIC - Pension funds in the Czech Republic saw their profits halve in the first six months of the year following the negative developments on the capital markets.
Figures released by the Czech Association of Pension Funds on Monday showed profits dropped to CZK1.46trn (€60bn) at the end of June, down from CZK2.63trn in the second quarter of 2007.
The fall comes as the funds generally have a high allocation to fixed income, with almost 77% of investments of the client assets allocated to bonds, compared to 4.9% in equities.
Aegon's Czech pension fund, launched last spring, saw profits fall most in the months from January until June, reporting a CZK24m decline.
In June, ING Penzijní fond reported a drop of almost 18% in net profit compared to the previous year, hitting CZK509.6m. (See earlier IPE story: ‘ING Penzijní sees profit falls 17.7%').
The pension fund claimed at the time the fall in profit of 17.7% followed "unfavourable developments" on the capital markets, and in particular a decline in the price of bonds, as this asset class accounts for more than 80% of the fund's overall portfolio.
If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email email@example.com