Pension reserve fund for Luxembourg returns nearly 4%

first_imgIn 2015, the FDC’s investment vehicle realised a return of 3.8%, according to its annual report.This is an outperformance of 0.32% of its benchmark index, an outcome it attributed to tactical allocation, in particular being overweight global equities.It said performance for 2015 started as a continuation of that of 2014, during which the SICAV had its best results since inception.Equities in particular “literally took off” to allow the SICAV, an open-ended collective investment scheme, to post returns far in excess of the 14% generated from its investments in the asset class at the end of the first quarter.This meant the fund surpassed FDC’s strategic equity allocation of 32.5%, necessitating a rebalancing by divesting within its indexed global equities mandate in favour of three global bond sub-funds.For its money market sub-funds, 2015 was “lifeless”, according to the SICAV’s annual report, generating returns of 8 basis points for an outperformance of its benchmark by 16bps.The vehicle’s euro-denominated bond investments returned nearly 1%, and global bonds 1.02%.Its emerging market bond and equity investments finished the year with negative returns of -5.50%, which it placed in the context of the fall in the oil price and other raw materials and slowing economic growth in China.The FDC SICAV had 21 sub-funds as at the end of 2015 – nine equity funds, 10 bond funds and two money market funds.Two new €250m sub-funds were launched this year for unlisted global real estate investments as the pension reserve fund seeks to meet a 3.5% asset allocation target for property outside Luxembourg.As previously reported, Aviva Investors and CBRE Global Investment Partners were chosen as the managers of these mandates. * Société d’Investissement à Capital Variable, a type of alternative investment fund introduced under Luxembourg’s transposition of the Alternative Investment Fund Managers Directive (AIFMD). FIS is the acronym for the French term for specialised investment funds. The investment company running the majority of assets managed by the €15bn Luxembourg pension reserve fund obtained a return of 3.8% last year, according to the vehicle’s 2015 annual report.Created in 2007, the Fonds de Compensation de la Securité Sociale SICAV-FIS* is the investment vehicle for the state pension reserve fund Fonds de compensation (FDC), in turn established in 2004.As at the end of 2015, the investment company had €14.4bn of assets under management (AUM), up from €13.48bn the previous year when this represented some 90% of the pension reserve fund’s AUM.The remainder is managed in-house by FDC.last_img