Austria’s €5bn Valida pension fund – comprising Valida Pensionskasse and Valida Industrie Pensionskasse – has performed in line with the market average for multi-employer schemes after posting a 5.33% return for 2013.
Last year, the Valida group integrated the former Siemens company pension fund and began to introduce a life-cycle choice for members, which is now in place.
For 2014, the Pensionskasse will continue to reduce “slightly” its exposure to corporate pension funds and go into higher-yielding fixed income investments instead, according to Andreas Zakostelsky, chairman of the board at the Valida group.
He told journalists in Vienna today: “The phase for real outperformance by corporate bonds is rather over.”
He said “selected” corporates would remain in the portfolio, and that the pension fund would focus on high-yield investments and peripheral European bonds – “but not Greece”.
With respect to its exposure to the European periphery, Zakostelsky pointed out that investors had to be careful not to let “exaggerated emotions swing the pendulum one way or the other”.
Further, Valida has increased its equity allocation from 33.3% to 35%. In 2012, it had been less than 30%.
“We will continue to dynamically adjust the equity allocation – with caution,” Zakostelsky said.
Together with the Siemens Pensionskasse, Valida also bought the company’s severance pay fund, or Vorsorgekasse, which is to be “fully merged” with the Valida Vorsorgekasse this year.
Both Vorsorgekassen in the Valida group managed a joint 3.19% return, compared with a market average of 2.8%.
At the €1.6bn Valida Vorsorgekassen, almost half of the assets were invested in money-market instruments, another third in corporates and 13% in government bonds.
The equity exposure was just 6%, which is typical for Vorsorgekassen that have to guarantee payout almost annually.