European equities drag down Spanish pension funds’ Q1 returns

first_imgStrengthening financial markets throughout March enabled Spanish occupational pension funds to achieve positive returns for the month, according to figures from Mercer’s Pension Investment Performance Service (PIPS).The average return for the month was 1.1%, the biggest – 2.4% – coming from non-EU equity portfolios.EU equity portfolios returned 2.1%, fixed income 0.3%.However, this did not compensate for the turbulence in the second half of 2015 and the first two months of this year. Across all asset classes, returns for the first quarter of 2016 were -0.4%, with EU equities returning -7.6% and non-EU equities -3.5%.Fixed income portfolios, however, made gains of 1.5%.The PIPS survey covers a large sample of Spanish pension funds, most of them occupational schemes.Over the 12 months to end-March 2016, fixed income returned exactly 0.0%, while EU equities returned -15.4% and non-EU equities -9.3%.Xavier Bellavista, principal at Mercer, said: “The quarter has seen volatile performances, especially in equity markets. EU equity assets had the worst negative performance, but non-EU equity assets also posted negative returns, especially because of the performance of non-EU currencies.”He added: “Fixed income assets are also increasing in volatility and have incurred a negative performance for some months.“EU fixed income assets made positive returns for the quarter to end-March, but lower returns are now expected because fixed income indices posted a negative performance during April.”Bellavista said non-EU fixed income assets had been affected by the negative performance of some emerging fixed income assets, and also by the depreciation in non-EU currencies.Meanwhile, according to Spain’s Investment and Pension Fund Association (INVERCO), occupational pension funds returned -3.33% for the 12 months to 31 March 2016.         Average annualised returns for Spanish occupational funds were 4.66% for the three years to 31 March 2016, and 4.67% for the five years to that date.As at the end of March 2016, total assets under management for the occupational pensions sector stood at €35bn, a decrease of 3.4% over the past year.Total pension assets, including those in individual plans, now amount to €103.1bn, while the number of participants in the occupational system remains stable, at just over 2m.According to INVERCO, the gradual shift away from domestic assets continues, with an average 60.6% of portfolios now invested domestically, compared with 61.4% at end-December 2015.Non-domestic assets made up 22% of portfolios as at the same date, with the balance in cash and technical provisions.Fixed income investments make up 57.3% of portfolios, barely unchanged over three months.The biggest single component of pension fund portfolios – 32.3% – is still invested in Spanish government bonds, with a further 16.3% in Spanish corporate bonds.Bellavista highlighted what he considered to be the most significant change in asset allocation in corporate pension funds in the past 15 years – the increased allocation to non-EU fixed income assets.“Historically, this allocation was close to zero,” he said. “But, in the past three to four years, it has increased to around 6% of corporate pension fund portfolios.”Over the past couple of years, he added, Spanish pension fund managers have been increasing the duration of fixed income portfolios in response to the extremely low interest-rate environment.The average duration of corporate pension funds rose from 3.5 years at end-2013 to 4.5 years at end-2015.Meanwhile, an average 21.2% of portfolios is invested in equities, down by 1.4 percentage points since end-December, according to INVERCO.The category of ‘other investments’ – real estate and alternatives, almost all invested domestically – has increased from 3.6% at end-December 2015 to 4%, more than double the percentage in December 2011.last_img read more

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Four couples in search of more space fight over Brisbane bungalow

first_img Sneak peek into travel king’s controversial mansion Four couples set their eye on 5 School Rd, Hendra.After almost eight weeks of being forced to live, and even work, in close proximity, four Brisbane couples last week decided enough was enough.Fed up with being confined to their inner-city apartments they decided it was time to buy a house and turned their attention to a little Californian bungalow in Hendra. The house attracted the attention of four seperate couples.For each of them the property at 5 School Road in Brisbane’s leafy northside suburb was the perfect entry level home. For some of them it offered affordability, coupled with enough space to save their relationship. None of the couples had seen the property prior to COVID and some had not even consideredentering the property market before putting an offer in on the home. Amy Jamieson and her partner Ryan bought 5 School Rd, Hendra, during COVID-19 to give each other some more space, after renting for yearsAfter a fierce battle it was Amy Jamieson and her partner Ryan, that secured the house for $855,000 through Ray White New Farm.The couple had been renting a two-bedroom apartment in Bowen Hills and had been looking for a place for about 18 months.“We had never considered Hendra before,” Ms Jamieson said. “We were quite lucky because we ended up buying in an area in which we didn’t think we could afford to live,” she said. The house offers the couple, who have been renting an apartment, more space.While the couple have been working during the pandemic, Ms Jamieson said she could see how the restrictions would be putting a strain on relationships.“When we had to work from home, being in an apartment Ryan would be in the kitchen and I was 2m away in the lounge and I felt I had to be quiet and not make a noise because he had to make phone calls. It can really test people’s patience levels.”With their house having four bedrooms on a decent-sized block, the couple will have the opportunity to carve out their own space.More from newsParks and wildlife the new lust-haves post coronavirus9 hours agoNoosa’s best beachfront penthouse is about to hit the market9 hours agoMs Jamieson said, for Ryan, that would probably be the rustic tin shed out the back. The tin shed was one of the biggest attractions of the property for the couple.“The shed was one of the things that first attracted us to the property. Ryan has a car and a motorbike and stuff, so it was definitely a selling point. We had looked at other houses but none of them had a shed, so I think it was what convinced us to inspect the property in the first place.” The property is modest but much more spacious than an apartment.Selling agent Christine Rudolph said this was the perfect time for sellers to list their propeties because there were plenty of eager buyers in the market.“It’s a great time coming out of COVID for sellers to jump in and capitalise on theshortage of quality supply and the optimism we are seeing from buyers,” Ms Rudolph said. MORE: Huge interest in termite-infested housecenter_img How some men have survived lockdown Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 1:40Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -1:40 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels540p540p360p360p270p270pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenCOVID-19: How the property market is tracking01:40last_img read more

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