Private pension funds sell shares and buy bonds

Private pension funds, both mandatory (2nd pillar) and voluntary (3rd pillar), reduced their exposure to shares in August and bought more bonds, reveals data from the Private Pensions Supervisory Commission. Mandatory pension funds, with overall investments that amounted to 395.2 million RON (111.9 million euros) at the end of August, reduced investments in shares from 5.66% in July, to 4.23% of their overall exposure, amid turmoil on the Stock Exchange. On the other hand, the funds relied more on investments in fixed-income instruments. The share of placements in government and municipal bonds climbed from 58.89% in July to 60% in August, while investments in corporate bonds climbed from 12.77% to 17.15%. Last month, the funds continued to remove their money from banks, whilst the share of banking investments fell from 22.37% to 18.22%, reveal data from the Private Pensions Commission. In the same period, investments in mutual funds amounted to 0.41% of the total, compared with 0.32% in the previous month. The largest mandatory pensions fund on the market, ING, placed around 67% of the clients’ money in government and municipal bonds. No. 2 on this market, the fund managed by Allianz-Tiriac Pensii Private, invested almost 49% of money in these instruments. As for voluntary pension funds, they reduced their exposure to shares by around 1%, to 6.92%. These funds continue to rely on government and municipal bonds, which account for 70.77% of the investments, compared with 71.39% in July.