OFP FIM pension fund increases EM exposure

19 Jul 2011

Belgium’s OFP FIM Pension Fund has recently increased its exposure to emerging markets equities and debt, Mena FM has learned.

The pension fund, which is worth €27m ($38m), has increased its exposure to global emerging equity from 18% to 20%, while its exposure to emerging market debt has debuted at 6%, with 3% going each way to local and hard currency.

The new allocations were implemented in June 2011, and although the pension fund does not take strategic positions on individual regions, exposure to Mena will be included in the global emerging market and debt strategies.

“The increase in our allocation to emerging markets cannot be considered ‘new’ as we have been investing in this area since 2005,” said Sonia Alvarez, head of Belgium PR at BNP Paribas, which manages the fund. “The latest review simply increases our exposure to the emerging market asset classes which were already contained within our strategic asset allocation.”

“We strongly believe that over the next decade emerging markets will shape the investment landscape,” she added. “The current level of investment does not adequately reflect the growing importance of emerging markets in world society.”

The fund expects returns of 11.2% from the global emerging equities allocations over the next five to seven years, including 5% from global emerging local debt over and 5.6% from the global emerging hard currency debt.

The new exposures are broadly in line with global emerging market indices MSCI Emerging Markets, JPB GBI-EM Global Diversified and JPB EMBI Global Diversified.