Fondo Pensione Quadri e Capi FIAT — the Italian pension scheme for the employees and professionals working at automaker Stellantis, manufacturer of agricultural machinery and construction equipment CNH Industrial, and commercial vehicles Iveco Group – has changed the strategic asset allocation for its sub-funds ‘Reddito’ and ‘Crescita’ to mitigate geopolitical and economic risks currently impacting Europe.
The defined contribution (DC) corporate pension scheme, with assets under management of €762.25m, has introduced world equity benchmarks for its equity investments to give “greater flexibility” to asset managers to invest assets, it said in its latest annual report.
An overweight position to the euro zone equity market would expose the pension fund “to a greater risk of losses”, resulting from potentially negative impacts on the European economy, and the European geopolitical situation following the Ukrainian-Russian crisis, it added.
The new benchmark gives the possibility to tactically diversify investments geographically, the report stated.
According to the new strategy, assets in the sub-funds ‘Reddito’ and ‘Crescita’ are invested in MSCI world equities benchmarks, including one hedged to euro currency.
The pension fund has followed the same approach to rejig its investment in corporate bonds, opting for one global corporate investment grade benchmark.
It has replaced two corporate indices with a single corporate global investment grade index in order to have at its disposal more tools to mitigate risk, reducing the degree of correlation within its portfolios, it added.
The scheme targets 15% of the assets in the sub-fund ‘Reddito’ and 5% of the assets in the sub-fund ‘Crescita’ invested in the Bloomberg Barclays Global Aggregate TR Hedged index.
It has also decided to introduce private debt investments worth 10% of the assets in the sub-funds, and a 5% allocation to private equity in the ‘Crescita’ option. Investments in private markets adopt a “satellite” approach, it added.
The scheme also added the corporate high-yield euro asset class, allocating 5% of the assets in the ‘Reddito’ and ‘Crescita’ options.
The pension scheme handed out mandates last year to Anima to manage assets in its third sub-fund, ‘Stabilità’; to BlackRock, Generali Insurance Asset Management, Eurizon Capital, and Eurizon Capital Real Asset for ‘Reddito’; and to BlackRock and Eurizon Capital Real Asset for ‘Crescita’.
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