Pension Insurers Switch Strategies as Assets Fall
The Sofia Echo
November 4, 2008
Bulgarian pension funds have stepped up investments in bank deposits and corporate bonds and cut down on collective schemes in the first nine months of 2008, statistics from the Financial Supervision Commission showed.
Voluntary funds invested heavier in Government securities at the expense of bank deposits, as did occupational and universal schemes, but deposits made up a larger chunk of their portfolios, compared to the situation at the end of the first half of the year.
Market sources have said that funds tended to buy instead of selling shares, but many of them changed their investments strategies months ago.
Funds were tapping on short-term debt instruments and maintaining high liquidity in settlement accounts and short-term deposits, said expert Lyubomir Yanev. All funds have lowered risk exposure and are only buying stocks with good fundamentals already present in their portfolios, Yanev said.
Budeshte fund financial director Valentin Garvanski said pension insurers had not veered off investment strategies, but were simply adjusting to new market conditions.
The combined net assets of Bulgaria’s pension insurers rose 10 per cent in the 12 months to September 2008, reaching 2.4 billion leva. However, they increased by a modest three per cent in the January-September period, with voluntary schemes slumping 16 per cent to 571 million leva over the falling values of investment instruments and the withdrawal of customers.
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