In an effort to cut its risk profile, Dutch incumbent KPN’s pension fund last year cut its allocation to government bonds of eurozone and emerging economies.
According to its annual report, the E4.1bn Stichting Pensioenfonds KPN reallocated the capital…
In an effort to cut its risk profile, Dutch incumbent KPN’s pension fund last year cut its allocation to government bonds of eurozone and emerging economies.
According to its annual report, the E4.1bn Stichting Pensioenfonds KPN reallocated the capital to inflation-linked bonds and corporate bonds instead. By the start of this year, the actively managed portion of its fixed income portfolio was made up of 60% corporate bonds, 30% emerging market government bonds and 10% high-yield bonds.
Having decided against investing in the volatile equities market last year, the KPN fund temporarily raised its allocation to corporate bonds at the expense of equities, and kept additional liquidity as a tactical decision. The pension fund also decided to maintain its overweight position on its 44.5% fixed income allocation by 4.5 percentage points relative to its strategic target.
The schemes managers also have stated they would not change their strategic investment policy in 2010, following a recent asset-liability management study, which aims for 41% equities, 5% commodities and 1% hedge funds.
