DENMARK - Finanssektorens Pensionskasse, the Danish pension scheme for financial sector workers, is adding a hefty slice of property exposure to the unit-linked scheme now used by all new members.
It is also shifting the geographical equities allocation of one part of the offering towards emerging markets and away from global and domestic exposure, it said.
"For many years, FSP has had success with investments in quality real estate - both in the spreading of risk and in the form of stable returns," said Søren Schjødt-Hansen, head of finance at FSP.
"Therefore, we are introducing the property fund Ei invest European retail to the three FSP Vælger funds in order to strengthen the funds' diversification and long-term returns," he said.
Ei invest European retail will form 15% of the low-risk and medium-risk Vælger funds, and 10% of the high-risk choice. This compares with the 15% portion of FSP's total pension scheme assets held in property funds and buildings.
FSP introduced the unit-linked FSP Vælger, or WebLink, scheme in 2006, and from January 2007, contributions from all new members are directed into this product, which - unlike FSP's traditional with-profits scheme - does not include a return guarantee.
Scheme members can choose between three investment options, which are labeled as low-risk, medium-risk and high-risk, or they can opt to concoct their own investment mix from a range of funds.
With real estate being introduced as a new element, the investment composition of all three risk-graded investment choices is being adjusted, FSP said. "In all three funds the proportion of short-term bonds is being reduced," it said.
"There is a change in the geographical equities allocation, with greater weight being given to shares in emerging markets," the scheme said. "This is because of a desire to bolster diversification and an expectation that growth will be most enduring in the economies of emerging markets - having a positive effect on the equities markets there," it went on.
In the FSP Vælger medium-risk option, emerging markets investments will now make up 10% of the allocation, with a corresponding cut in the global and Danish shares allocation, Schjødt-Hansen told IPE. The high-risk option already includes 10% emerging markets exposure, he said.
FSP also said it was adding two new funds to the options available for those composing their own pensions portfolio. The new funds are EGNS-INVEST Obligationer (bonds) Pension and Fionia Invest Aktier (equities).
FSP has total assets of around DKK23bn (€3.08bn), but only around 0.5% of that sum is held via the FSP WebLink scheme.
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