AUSTRIA - The €500m Victoria-Volksbanken Pensionskasse intends to raise its exposure to corporate bonds.
As part of its strategy for 2009, the retirement provider will up its stake in corporate bond funds "step-by-step, according to officials, though no detailed figures were given.
"Almost all our investments are in funds, we hardly hold anything directly apart from our hold-to-maturity exposure", said Ferdinand Kernbauer, chairman of the board at Victoria Pensionskasse.
Like all Austrian pensionskassen, the Victoria-Volksbanken group offers different portfolios for different groups of members with asset allocations ranging from "defensive" to "dynamic" and the share of bonds ranges from 35% to 80% accordingly.
Victoria expects the financial sector to remain under pressure because of expected credit losses.
However, the insurance/banking group is convinced that the "measures taken by the governments and federal banks will take effect over the medium-term" and a sustainable economic recovery can be expected "from 2010 at the earliest".
Once the economy stabilises again, the pensionskasse also intends to get rid of hedges in its equity portfolio but will continue diversification in its portfolios.
The pensionskasse's strategic asset allocation means it currently invests 5-40% in equity funds, 5% in convertible funds, 3% in a commodity index fund, 5-10% in alternative investments and 5-8% in real estate funds.
The pensionskasse reported a return in 2008 of +1% in the defensive portfolios but there were losses of 5.5% in the balanced and 13.7% in the dynamic portfolios.