Denmark’s PenSam said it will hold fast to its current investment strategy amid volatile markets shocked by the coronavirus pandemic, with the diversification of its portfolio having guarded it against the worst of market falls in the first quarter.
Torsten Fels, PenSam chief executive officer of the social and childcare sector pension fund, said: “Despite very large price declines especially for listed equities, we are maintaining our investment strategy.”
While nearly all asset classes had been hit, listed equities had been the worst affected so far, said the DKK155bn (€20.8bn) fund, which covers members of the FOA trade union.
“We, like others in the industry, have a negative return this year, but the diversification of our investments has limited the effect,” said Fels.
“We have the capital strength to withstand further price declines,” he said.
Munich-based pension fund Bayerische Versorgungskammer (BVK) has also said it will continue with its current diversification strategy during the period affected by the COVID-19 pandemic, although the approach could be adjusted in the near future.
PenSam reported a 7% investment loss for first quarter, but the firm – which runs an average-rate pension scheme – said it would nevertheless pay a 3.54% annual account dividend to members for the period.
Fels said his company wanted to give its customers confidence in their labour-market pension from PenSam.
“The reason we can maintain stable account dividends is because we have put aside part of the good return we delivered in the last few years,” he said.
PenSam also announced it was merging its pension fund subsidiary Pensionskassen PenSam – whose assets had been decreasing for the last 30 years – with its core unit PenSam Liv, following approval of the move at the general meetings of both businesses last month.
“It is important that our pension schemes are constantly managed cost-effectively, and we are achieving an obvious simplification by having a single pension company within PenSam,” Fels said.
The joint company will be named PenSam Pension, once the Danish FSA approves the merger, which the firm said it expected to happen in the autumn.