Germany’s Bayerische Versorgungskammer (BVK) has opted not to reduce holdings in “riskier” asset classes in the wake of the ECB’s recently announced quantitative easing (QE) programme and instead increased exposure to “certain segments” of the market.

André Heimrich, head of investments at the BVK, told IPE part of the pension fund’s strategy was to react to changes in the market “as early as possible” by “continuously looking into possible capital market scenarios”.

He said the BVK had “already” removed foreign currency hedges on volatile assets classes last year, allowing the pension fund to profit now from the appreciation of the US dollar and Swiss franc.

Similarly, Claudio Gligo, head of asset management at Austrian pension fund Victoria Volksbanken Pensionskasse, said the QE programme would most likely favour risky assets such as equities and corporate bonds, including high yield, due to the “enormous liquidity” coming to the markets.

He said he expected the euro to weaken further, allowing foreign currency assets to have a “positive effect” on the portfolio.

He conceded, however, that the long-term effects of the ECB’s policy – particularly with respect to the ultimate withdrawal of QE – remained a big question mark.

For the German Association of Corporate Pension Funds (VFPK), the ECB’s decision to buy €60bn worth of European bonds a month is a disaster.

The VFPK said the move would hinder pensions provision, “as savers cannot get any return on their investments”, adding that the low-interest-rate environment was being held in place “for monetary policy reasons”.

It also argued that quantitative easing had “thwarted the German government’s project to strengthen retirement provision in general via more funded solutions”.

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