Spanish pension schemes hit record equity exposure

On the 02/01/21 at 7:32AM


Adrien Paredes-Vanheule

Local and foreign equity investments of Spanish pension funds are at their highest since 2015.

The upturn of stock markets in the fourth quarter of 2020 has benefited Spanish pension schemes, which have ended the year with total assets of €118.5bn, data from local asset management association Inverco suggests. The figure was up 4.86% quarter-on-quarter (or +€5.5bn) and rose 1.8% year-on-year (or +€2.1bn). Regarding contributions, Spanish pension schemes stressed an overall net €1.18bn net contribution from their participants in 2020, up 40% yoy (€828m in 2019).

With stock markets’ valuations surging, the overall equity exposure of Spanish pension schemes’ portfolios hit a record high at 37.5% as of end December 2020. That was split between a 13.6% exposure to Spanish equities and the remaining 23.9% to foreign equities, the highest level recorded for both segments over the last six years according to Inverco’s data. Spanish pension funds hit a new high in foreign securities’ exposure at 34.2%. Their foreign investments constantly grew from 22.1% as of end 2015.

Conversely, the portion of assets invested by Spanish schemes in local securities (equities, fixed income, other assets) reached its lowest level since 2015 with a 51.4% exposure to these assets. In particular, their exposure to Spanish govies almost halved over the period, tumbling from 33.3% at the end of 2015 to 16.9% at the end of 2020, whereas that to Spanish corporate bonds remained stable at 14.8% like in 2019. In addition, for the first time, exposure to other local assets than debt and equities has surpassed the 5% threshold, ending 2020 at 6.2%.