DENMARK- Finanssektorens Pensionskasse, the Danish pension scheme forfinancial sector workers, is adding a hefty slice of property exposureto the unit-linked scheme now used by all new members.
"For many years, FSP has had success withinvestments in quality real estate - both in the spreading of risk andin the form of stable returns," said Søren Schjødt-Hansen, head offinance at FSP.
"Therefore, we are introducing the property fundEi invest European retail to the three FSP Vælger funds in order tostrengthen the funds' diversification and long-term returns," he said.
Eiinvest European retail will form 15% of the low-risk and medium-riskVælger funds, and 10% of the high-risk choice. This compares with the15% portion of FSP's total pension scheme assets held in property fundsand buildings.
FSP introduced the unit-linked FSP Vælger, orWebLink, scheme in 2006, and from January 2007, contributions from allnew members are directed into this product, which - unlike FSP'straditional with-profits scheme - does not include a return guarantee.
Schememembers can choose between three investment options, which are labeledas low-risk, medium-risk and high-risk, or they can opt to concocttheir own investment mix from a range of funds.
With real estatebeing introduced as a new element, the investment composition of allthree risk-graded investment choices is being adjusted, FSP said. "Inall three funds the proportion of short-term bonds is being reduced,"it said.
"There is a change in the geographical equitiesallocation, with greater weight being given to shares in emergingmarkets," the scheme said. "This is because of a desire to bolsterdiversification and an expectation that growth will be most enduring inthe economies of emerging markets - having a positive effect on theequities markets there," it went on.
In the FSP Vælgermedium-risk option, emerging markets investments will now make up 10%of the allocation, with a corresponding cut in the global and Danishshares allocation, Schjødt-Hansen told IPE. The high-risk optionalready includes 10% emerging markets exposure, he said.
FSP alsosaid it was adding two new funds to the options available for thosecomposing their own pensions portfolio. The new funds are EGNS-INVESTObligationer (bonds) Pension and Fionia Invest Aktier (equities).
FSP has total assets of around DKK23bn (€3.08bn), but only around 0.5% of that sum is held via the FSP WebLink scheme.