Austrian occupational provident funds (Betriebliche Vorsorgekassen) have increased their allocation to bonds and equities during the course of 2023, cutting exposure to real estate.
Provident funds have followed the same investment trajectory of Pensionskassen on bonds, but not on equities and real estate.
Provident funds’ investments in bonds increased from 61.64% of total assets at the end of 2022 to 63.87% at the end of the third quarter of 2023, according to a report published by the Financial Market Authority (FMA).
Allocations to equities also grew to 13.05% as of September 2023 from 10.43% at the end of 2022. Provident funds have heavily cut their exposure to equities since 2021, when it reached a peak of 20.33%, FMA figures show.
FMA’s report also showed that the pension schemes reduced their allocation to real estate from 7.10% at the end of 2022 – the highest level in the last five years – to 6.59% at the end of the third quarter of 2023.
The largest allocations are still in bonds and equities, followed by deposits at credit institutions (7.91%), real estate (6.59%), loans (4.83%) and other assets (3.80%), it added.
Assets under management amounted to €17.84bn at the end of the third quarter of 2023, a 7.66% increase year-to-date, and a 2.18% increase quarter on quarter, according to the report.
Austrian provident funds have returned 1.22% in the first three quarters of last year. On average, the funds returned 1.27% annually over the past 10 years, 0.43% over five years, and -0.14% over three years, it added.
FMA also disclosed that eight occupational provident funds manage pension entitlements of around 10.76 million beneficiaries, including multiple entitlements held in different funds, an increase of 79,000 or 0.74% in Q3 last year. The average assets of a beneficiary are €1,659 as of 30 September 30 2023.
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