Austria’s APK Pensionskasse and APK Vorsorgekasse have reduced their exposure to US dollar-denominated assets in the first half of the year, while increasing focus on opportunities in Europe.

“We have actively been reducing US dollar risk in our portfolio, which has been beneficial so far this year,” said Manfred Brenner, chief investment officer of APK Pensionskasse.

He explained that on a relative basis, the US had become less attractive compared to Europe, particularly for sovereign bonds.

“In Europe, we found good opportunities in financial stocks and investment-grade corporate bonds,” he added.

APK, which typically manages equity risk actively, made no material changes to its overall asset allocation.

“APK is a strong believer in global diversification and to some extent profited from this in the first half of the year,” Brenner said.

APK Pensionskasse, which manages €6.3bn, delivered flat to slightly negative returns in the first half, depending on portfolio allocation. APK Vorsorgekasse, by contrast, returned 0.71% as of end-June, according to Brenner.

Performance was dented by volatility linked to tariffs imposed by the US administration on Liberation Day.

Pension funds across the DACH region have been adjusting allocations in response to US trade and tariff policies, cutting exposure to equities, the dollar and US Treasuries, while shifting towards private assets, Europe and emerging markets.

Looking ahead, Brenner said political risk and market volatility remain key challenges.

“We [also] consider the changes to the pension system in the Netherlands to be one factor that can influence the bond curve quite dramatically this year and the following years. This may also influence other asset classes with longer maturity,” he added.

Dutch pension funds are gradually unwinding government bond holdings as they transition to the new defined contribution system.

In Austria, provident funds (Vorsorgekassen) invest 65% of total assets under management (AUM) of €22bn in bonds. Pensionskassen, with €28bn in AUM, allocate 41% to equities and 31.5% to bonds, according to first-half figures from the Financial Market Authority (FMA).

Provident funds returned 0.34% in H1, while Pensionskassen posted -0.87%, FMA reported.

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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