Fonds de Reserve pour les Retraites, Paris, formally adopted on Tuesday a new strategic asset allocation as part of a review started in January.
The €28.9 billion ($40.1 billion) funds new strategic allocation is 45% equities, 25% fixed-rate bonds, 20% indexed bonds, and 5% each in real estate and commodities. The actual allocation as of May 30 was: 45% equities, 33% bonds, 18% cash and 4% other investments, according to a news release from the system.
Combined allocations to performance assets equities, real estate and commodities will be allowed to fluctuate between 40% and 60% of total assets. The weight of these assets will be reviewed annually, the funds supervisory board decided.
The previous strategic asset allocation, completed in 2006, was 60% equities, 30% bonds and 10% diversification assets.
In May, FRR issued RFPs for bond managers to run up to a combined €7 billion and for two active managers to run a combined €1 billion in direct European real estate.
Attempts to reach FRR spokeswomen for comment by press time were not successful.