HUNGARY - Hungarian pension funds saw their assets fall in value by 8.1% in the first quarter of this year to HUF1,856bn (€7.34bn), according to Bamosz, the association of Hungarian investment fund and asset management companies.
Bamosz, whose members manage approximately three-quarters of pension fund assets, said the drop was because of falling share prices in the aftermath of the credit crunch.
But despite the drop, pension funds increased their allocation to equities in the first three months of the year by 3.2% to 32.2% - 70% of which is in ovreaseas shares - at the cost of bonds.
Funds cut their allocation to Hungarian government bonds by 14.6% in the first quarter to HUF921bn, showing a continued departure from government bonds.
US treasury bills also saw a decline, with a drop of 8.5% to HUF127bn.
Equity allocation still stood at 21.6% a year ago, and lower still at 15.2% in the year before, according to Bamosz' figures.
This continued increase in equity holdings has been in anticipation of new regulation from 2009, which will require all second pillar pensions funds in Hungary to offer their clients a choice of three portfolios: the ‘classical' with around 5% equity exposure, the ‘average' with 29% and the ‘dynamic' with 59%.
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