GERMANY – AS-fonds, Germany’s third pillar DC savings plans returned an average of two-per cent last year in spite of the market turbulence, according to the Frankfurt based BVI funds regulator.
However, figures for total investment in the funds – launched in April 1998 - come out at a relatively disappointing e2.7bn (DM5.3bn)....

According to Rudolf Siebel, head of policy at the BVI, the inflow into AS-fonds for the first quarter of this year was e121.8m, although he notes that figures for March show a slight downturn of minus e6.8m.
Commenting on the slightly damp overall figures for AS-fond investing, he says: “ We find more and more references in the press that AS funds, unfortunately for our members, are not the main sales instruments.
“ On average the front-end sales load is around 3% compared to around 5% for equity funds, so the brokers prefer to sell equity funds and a lot of companies still put the main interest in marketing on equity funds.”

Siebel says the performance of the funds last year, however, speaks for itself: “I think that the performance was quite OK. We had performance highs of 42% and so over 2000 maintained an average level of two per cent.
“ The AS-fonds have shown that they are able to withstand market crashes.”

AS-fonds must invest a minimum of 50% in equity or real estate, though there are ceilings of 75% for equity and 30% for real estate.
Real estate can include direct property holdings, as well as real estate funds and companies.

Siebel says he believes Germany’s forthcoming pensions law could be a boon for the AS-fonds industry though: “ We expect that the numbers for balanced managed AS funds will increase with the passing of the pensions law, because you have to give a guarantee for the investment amount.
“ This is naturally easier with a balanced mandate because of the bond content.
“ So we expect that with the coming of the tax subsidies for private pensions, AS funds will gain market share.”

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