Migros Pensionskasse (MPK), the CHF29.3bn (€31.6bn) pension fund for the Swiss retailer, has designed a new, riskier strategic asset allocation for 2025-29, increasing its exposure to real assets and equities, while cutting nominal value investments.
“We have a long-term investment horizon and assume that real assets will generate higher returns over a longer period of time,” chief investment officer Christoph Ryter told IPE.
This is the right step to take for the pension fund, especially considering that national deficits in many industrialised nations are at historically high levels, and inflationary forces are at work, he added.
MPK’s new strategic asset allocation foresees a 2 percentage point increase in infrastructure and equity investments.
The scheme now targets 39% of total assets under management (AUM) invested in real estate and infrastructure, up from 37% under the old strategy, and 30% in equities, up from a previous 28%, it said.
“We have had very good experiences with infrastructure investments that in recent years have performed well and contributed to diversification in an environment of high volatility and increased inflation. That’s why we increased the allocation from 4% to 6%,” Ryter said.
Nominal value investments will decrease over the next four years by 5 percentage points, from 33% to 28%, according to the new strategy.
MPK will also increase allocations to gold, “a crisis-proof investment”, according to the CEO, by 1 percentage point to 3% of total AUM.
The pension fund expects an average return of 3.5% per year over the next 10 years, well above the current target return of 1.5%, it said.
The current investment strategy has led to a funding ratio that at the end of September stood at 135.6%. MPK has returned 5.9% year-to-date, against a 5.6% benchmark, it said.
IPE
Luigi Serenelli befasst sich auf IPE mit der Anlage-Strategie der Migros Pensionskasse.