Assets invested by German pension schemes in Spezialfonds shrunk by €57bn in the first three quarters of this year due to higher interest rates, consultancy Kommalpha said in its latest quarterly report.
Spezialfonds managed assets of €2.11trn at the end of January this year, with the yield on 10-years German government bonds at -0.02%, after oscillating slightly below zero in January.
Since the end of January, assets in Spezialfonds fell by a remarkable €239bn to €1.87trn, despite positive net inflows, with the yield on German government bonds increasing by 210 basis points over the same period to 2.12% at the end of September.
The rise in interest rates burned €239bn through repricing of bond holdings in Spezialfonds, Kommalpha said.
German pension schemes have pumped €7.8bn net in Spezialfonds in the third quarter of this year, although they had to record a net outflow of funds of around €770m in September, the quarterly report added.
Pension schemes also lead for cash deployed in Spezialfonds in the third quarter of the year with a total of €24.4bn, including €19.6bn committed in August.
Insurance companies ranked second with a total of €18.6bn in cash inflows in Spezialfonds in the third quarter.
Insurers committed only €1.2bn net in Spezialfonds mandates, withdrawing almost €17.4bn of liquidity in Q3.
Austrian fund industry hit by war in Ukraine
Assets managed in Austrian investment funds fell by 13.9% in the first nine months of this year to €198.6bn, from a historic record high at the beginning of the year of € 230.7bn, according to figures published by the Financial Market Authority (FMA).
The fund industry was hit by losses in capital markets resulting from massive volatility following Russia’s war against Ukraine, the regulator added.
Assets in mixed funds fell by 12.3% since the beginning of the year to €92.8bn, assets in equity funds by 20.3% to €35.1bn, and in short-term bond funds by 8.7% to €5.5bn year-to-date in the first nine months of 2022.
Assets instead grew in real estate funds by 3.5% to €11.4 bn, in private equity funds by €0.8bn, and in sustainability funds according to Article 8 and 9 of the Sustainable Finance Disclosure Regulation (SFDR) by 10.8% quarter-on-quarter to €78.2bn, it added.
The number of foreign funds active in Austria has been increasing steadily in the past five years, totaling 10,550 at end of the third quarter this year, including 2,535 alternative investment funds (AIFs) and 8,015 Undertakings for Collective Investment (UCITS).
Most of the providers come from Luxembourg and Ireland, followed by Germany and France, it said.
Swiss cabinet sets date for first pillar reform
The Swiss Federal Council has set the date for the AHV 21 reform to come into force for 1 January 2024.
The increase in VAT and the retirement age for women were the two building blocks for the reform of the first pillar pension system approved by a referendum in September.
VAT rates are adjusted at the beginning of the year in order to keep the administrative burden on taxpayers low.
The ordinance to increase VAT rates to finance the AHV will enter into force on 1 January 2024, with the standard rate of 8.1% that will apply, up from the previous 7.7%.
The retirement age for women will increase in four steps from 64 to 65 years old, with a fist increase of three months on 1 January 2025.
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