Emerging markets and high yield boost Progress’ fixed income
NETHERLANDS - With a yield of 12.8%, emerging markets and high yield bonds were the best contributors to the fixed income returns of 0.5% in Unilever Netherlands' pension fund Progress.
Progress reported an overall return of 9.6% last year while its assets under management rose by 6% to €4bn.
Equity and property returned 12.7% and 11.5% respectively while Progress' investments in fixed income, equity and property added 23%, 63% and 14% respectively.
The pension fund said it will "significantly" increase its share of small caps within its equity portfolio, however, a spokesman declined to be more specific.
This year, ‘a limited' part of European and US small caps will get a strategic allocation, the fund added.
In an additional move - based on an asset liability study - the scheme will also increase its positions in emerging markets and high yield investments, it stated.
Progress has also placed its €1.2bn emerging markets portfolio with Univest, Unilever's international Luxembourg-based investment fund, it said.
At the end of last year, Progress switched from a final salary arrangement to an indexed average salary scheme.
As of 2007, all workers contribute 0.5% of their salary to the scheme whereas only employees with a salary of over €56,700 previously had to pay premiums.
The scheme's coverage ratio increased by 3% to 155%, which allowed for a full indexation.