While Austrian Pensionskassen (pension companies) by and large invest in investment funds, as a rule they follow a diversified and dynamic investment strategy. Since only around one tenth of the almost one million people involved in occupational retirement provision are already drawing a pension, Pensionskassen have a relatively low liquidity requirement and therefore are able to pursue higher risk\/return profiles due to the long-term investment horizon. This allows them to make riskier investments such as “non-investment grade-rated bonds” as well as investments in unregulated markets. The investments are globally oriented and after hedging are held approximately 30% in foreign currencies. Investments in government debt are continuing to decrease further in light of the low interest environment. Dynamic investment strategies also explain the relatively high volatility of the performance of investments in upturn and downturn phases. On a long-term basis (since the system of this old-age provision) the investment performance is 5.2% per year on average. These are the findings of the FMA “Report on the State of the Austrian Pensionskassen 2020” (FMA Bericht 2020 zur Lage der österreichischen Pensionskassen), which was published today, which also has an analytical focus on sustainability risks, especially in relation to climate change as well as cyber risks and IT risks.<\/p>
Sustainability risks are not to be underestimated<\/em><\/strong><\/p>