Romania's mandatory pension funds post 5.1% net return after 6 months of operation
ROMANIA. The country's freshly launched mandatory pension funds (2nd pillar pensions) managed to post a net weighted average return of 5.1% for the first six months of operation, according to an analysis by www.privatepensions.ro.
The return is above inflation and above expectations, especially considering the effects of the crisis on the financial markets. 11 of the 14 mandatory pension funds on the market managed to post positive returns by betting on state bonds and bank accounts and keeping their equity / stock exposure to a minimum.
The funds invest about 80% of their 200 EUR mln. worth of assets (at the end of November) in state bonds and bank term deposits, benefiting from 12%-15% annualised yields on those instruments, and less than 2% in shares listed on the Bucharest Stock Exchange or elsewhere.
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