Lithuanian schemes generate positive returns despite ‘erratic’ markets

first_imgDespite what BoL termed this year’s “erratic” markets, however, 11 of the 21 funds – all the conservative ones, two low-risk and three medium-risk structures – managed to produce positive returns.Audrius Šilgalis, chief specialist of BoL’s financial services and market analysis division, noted on the Bank’s website: “Good pension fund performance for the second quarter, even after the Brexit referendum, which shocked financial markets, offset the influence of negative trends that prevailed at the beginning of the year.”Second-pillar assets grew by 9.9% to €2,246m and membership by 4.2% to 1.19m.The asset growth was boosted by this year’s increase in the additional members’ and state budget contribution rates from 1% to 2%.These accounted, respectively, for 22.6% and 24.6% of the €128.3m asset increase since the end of 2015.Returns for the substantially smaller third pillar showed a similar pattern to that of the second, with the average plunging from 6.06% as of the end of June 2015 to minus 1.22% by the end of the following March, then recovering to minus 0.02% three months later.The conservative funds averaged 2.3%, with all three in positive territory.While the four medium-risk funds averaged minus 0.72% and the five high-risk plans minus 0.83%, one fund in each category managed to buck the trend.The number of members increased year on year by 10.3% to 48,951, while assets grew by 23.4% to €66.1m because of higher contributions from participants. The six-month year-to-date nominal returns for the voluntary second-pillar pension system averaged minus 0.10%, according to the Bank of Lithuania (BoL), the country’s pension regulator.This marked a significant deterioration compared with the 4.7% generated 12 months earlier but was an improvement on the first quarter’s return of minus 0.18%.The best results as of the end of June were generated by the six conservative bond funds, at 0.77%, followed by the four low-risk funds with 25-30% equity investment (minus 0.01%), the seven medium-risk funds with equity limits of 50-70% (minus 0.02%), and the four high-risk funds, with up to 100% invested in equities (minus 1.32%).This is a reversal of last year’s trend when high equity levels generated the best results.last_img read more

AP7 return leads Sweden’s premium pension providers in 2016

first_imgHistorically, it said, AP7’s Såfa had been “a very good option”, with the balanced fund having returned an annual 9.6% on average since inception in 2000, while the corresponding return for pension savers with their own portfolio had been 6.5% over the same period.Some 48% of premium pension savers had their money in AP7’s Såfa at the end of 2016, and this capital amounted to 30% of the entire fund capital contained in the PPM, according to the report.Sustainable investments featured more heavily in the PPM as a whole last year than the year before, the agency reported, with a rising proportion of capital in unit-linked funds meeting the SWESIF (Swedish Forum for Sustainable Investments) criteria.The proportion of capital grew to 65% in 2016 from 57% in 2015, according to the report.Bengt Norrby, statistical director of the Swedish Pensions Agency, said: “This increase is mainly due to the fact that a number of funds with a lot of capital now meet SWESIF’s requirements for sustainable investments.”At the end of last year, 7.2m individuals participated in the PPM, including 5.8m pension savers and 1.4m pensioners, the agency said.Total assets under management in the system rose to SEK983.5bn (€101.7bn) at the end of last December, of which SEK960bn was in unit-linked insurance and SEK23.5bn in traditional insurance. Sweden’s default provider in the premium pension system (PPM) AP7 has beaten the average return of non-state premium pension providers in 2016 with a 13.9% on its Såfa balanced fund, against a 9.5% return on average from the other providers.In its report on the PPM for 2016, the Swedish Pensions Agency (Pensionsmyndigheten) described 2016 as a good year for the system in its entirety, although it said performance at a handful of non-state funds had been “doubtful”.The PPM is the funded part of the Swedish state pension that allows pension savers to make their own investment choices, investing their contributions either in products from a wide marketplace of private sector investment fund providers, or with state pension fund AP7 in its default Såfa option.For pension savers who opted for some kind of management service from their marketplace provider, the return in 2016 was 6.5%, the agency said.last_img read more