NETHERLANDS - The €1.9bn pension fund for physiotherapists SPF is to start investing in infrastructure, and has also allocated 5% inflation-linked bonds within its fixed income portfolio.

The changes - to be implemented in the second half of 2008 - follow an ALM study and a portfolio construction study, which also led to an increase of the scheme's commodities allocation to 3%.

A reallocation has also been implemented to managers within the hedge fund portfolio, officials told IPE.

The Stichting Pensioenfonds voor Fysiotherapeuten reported overall returns of 3.9% during 2007, of which 1.2% was attributed to a 75% passive currency hedge against the US dollar.

By contrast, the occupational scheme's 22% equity allocation - regionally-diversified over several funds under a multi-manager approach - generated a negative return of -0.7%.

The fixed income investments yielded 1.6%, with its global high yield portfolio, managed by Russell Investments, returning 2%, the pension fund said.

Property and commodities were the best performing asset classes, with returns of 11.7% and 13.2% respectively, but hedge funds yielded -0.8%.

The overall return of the 10% alternatives allocation was 8%, and therefore had a clear diversifying effect, SPF stated.

The physios' scheme attributed the limited impact of the credit crunch on its real estate because to the high quality of its portfolio, consisting of almost 53% housing, 20% retail and 18% offices.

GTAA and Common Trading Advisor (CTA) performed excellently, according to the pension fund, though no returns details were provided.

Instead of active management, its TAA portfolio is run through ‘completion management', which is designed to minimise the risks of deviation of the strategic portfolio through transactions on a monthly basis, the scheme explained.

SPF introduced an unconditional indexation of 2.5% last year, so any extra compensation for inflation dependent on the scheme's financial position.

Following this decision, the fund's cover ratio dropped from 235% to 152% by the year-end, and then decreased further to 146% at the end of June. This is still well over the minimum of 127% required by the financial assessment framework FTK.

The Stichting Pensioenfonds Fysiotherapeuten has 15,285 active participants, 8,440 deferred members and 1,320 pensioners.

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