Pension funds boost investments in government securities and in shares

Mandatory private pension funds (2nd pillar), which manage
client contributions worth over 430 million euros, boosted their
investments in government securities and shares in August,
according to data from the Private Pensions Supervisory Commission
(CSSPP). Whereas in July, the share of investments in government
securities and in municipal bonds was 57% of the total, it climbed
to 61% in August. The share of investments in corporate bonds
shrank from 23% in July to 20.5% in August amid a decline in the
yield offered by these instruments to the level of government bond
yields. Investments in shares climbed to 6.1% of overall
investments, from 5% in July and 3.7% in June. For the first time,
shares outweighed bank deposits in funds’ portfolios, with the
latter accounting for just 4.7% of total investments, compared with
5.8% in July and 7.6% in June. Pension funds have very similar
investment policies, with the majority of them relying on
government securities and on corporate bonds. “No fund manager can
take the risk of having a very different allocation strategy from
others. A minimum yield is guaranteed, as stipulated in our norms,
and no manager can perform lower than this yield ratio for four
consecutive quarters,” explains Dorin Boboc, investment manager of
Allianz-Tiriac Pensii Private, which manages the second largest
fund on the market, with over 1.2 million clients.