20 Mar News march 2021
Due to the current limited number of English-language readers, we take the liberty of translating the following text by software only.
Avanea has started 2021 in a particularly dynamic way, with a lot of news that is about to happen and that we anticipate in this newsletter.
1. Avanea and sustainability (ESG)
The issue of sustainability in the field of asset management has gained in importance in recent years, especially when it comes to choosing which pension fund to entrust with the retirement savings of employees.
The sustainability analysis carried out last December shows that Avanea’s investments have long been managed in a sustainable manner. Particular attention in all investment classes is given to the selection of companies in which to invest.
A detailed analysis of the E (environmental), S (social) and G (governance) aspects of Avanea 30‘s investments reveals very positive results. We have chosen an index of over 500 globally recognised companies as a benchmark.
In its investment allocation, Avanea 30 adheres to the exclusion of investments in companies on the SVVK-ASIR (Swiss Association for Responsible Investment) list that are active in arms production.
Avanea 30 also complies with the much broader
exclusion list that would have applied if the 2020 arms initiative had been adopted by the Swiss people.
The Avanea 30 portfolio meets a significantly higher ESG standard than the benchmark.
In terms of carbon footprint, the analysis also showed that the CO2 intensity of the production of the companies in which Avanea invests is already at a significantly lower level than the benchmark.
2. Avanea DynamicS
With DynamicS, Avanea is embarking on a new path: the investment pool combines the expertise of two independent experts in the Swiss occupational pensions market, combining Avanea’s innovative aspects with the know-how and experience of Mercer, the world’s leading investment and pension advisor.
Avanea DynamicS stands out in particular for its investment strategy, relying on Mercer’s many years of experience in delivering sustainable above-market returns, minimising risk and ensuring strong governance.
Based on its extensive global research, Mercer is able to select the most suitable asset managers from a broad universe and combine complementary strategies to create a robust portfolio without sacrificing sustainability. Mercer’s prominence in the market helps not least to reduce fees and gain access to hard-to-find but highly profitable asset classes such as private markets.
3. New website
We are proud to present our new website www.avanea.ch, where you will find all useful information about Avanea Pension Fund including benchmarks such as coverage ratio, evolution of managed assets, number of affiliated companies, members and pensioners.
We launched the website with the claim ‘The future is permanent development’.
This vision best expresses our philosophy of understanding the needs of companies and their employees in order to offer modern and secure pension solutions without sacrificing good returns on capital. So that policyholders can benefit from higher benefits for a more comfortable old age.
4. Asset management
One cannot analyse the 2020 financial year without mentioning the Covid crisis, the occurrence of which – and the subsequent response of the authorities and central banks – strongly determined the performance of the financial markets.
The year 2020 started exceptionally well, continuing the trends of the second half of the previous year: high equity performance and low interest rates.
The pandemic that swept through China, or rather the response of the West surprised by the Chinese lockdown, caused a collapse in economic activity, an implosion of interest rates and one of the fastest falls ever seen in stock markets.
The sudden illiquidity of the global economy caused governments and central banks to react violently, ignoring all obstacles to monetary excess.
Central banks flooded the markets and governments outbid each other with spending packages. The tactic worked: markets rallied and gave investors a positive bottom line. Avanea performed 0.92% (benchmark 3.03%).
The analysis of differences highlights three aspects in particular:
We have therefore placed a major emphasis on the currencies of healthy countries – reducing investments in foreign currency bonds in favour of the Swiss franc and placing more emphasis on the Norwegian krone, the only country left with no net public debt. Unhealthy currencies such as the USD and EUR have been cut.
We hope that this strategy will bear fruit as early as 2021.
Outlook for 2021
This year it might work: financial markets are paying for higher inflation; this is the only solution left to quickly correct the imbalance caused by central banks.
Coordination of expansionary monetary and fiscal policy may be sufficient to facilitate a turnaround: inflation expectations, commodity markets and interest rates rise; but they must not rise too high, because higher interest rates get highly indebted countries into trouble. Complete control of interest rates by central banks is to be expected.
With the Avanea 30 portfolio, we are optimally positioned for such eventualities, through overweighting real investments and situational reduction in high debt currencies such as the USD.
The performance of 2.6% on 15 March shows an interesting figure.
5.GoLive: ... at distance
In view of the limitations on actual meetings, we are responding by offering some conference call dates (in German and Italian) as an alternative:
By clicking on the link you have the possibility to register directly for the presentation that suits you best.
We hope that this opportunity will at least partially compensate for the pleasure of a personal meeting.