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Nordic pensions innovate in asset allocation
03 April 2013
Nordic pension funds employ cutting edge asset allocation strategies. Anthony Lane investigates what institutional investors around the world can learn from them
Nordic pension funds
One hundred years after Sweden legislated to create the world’s first universal state pension, the Nordic countries are once again at the forefront of grappling with the existential questions facing European pensions.
In the case of Sweden, its prime minister, Fredrik Reinfeldt, recently told his notoriously hardworking compatriots that they should be prepared to work until the age of 75 in order to protect their pension incomes and floated the idea of extending student loans to the over-55s so as to boost retraining.
But the most immediate challenges are a result of the exceptionally low government bond yields that schemes have had to contend with in recent years. Beneficiaries of near-balanced government budgets, relatively high economic growth and low national debt, the Nordic nations’ 10-year sovereign bond yields have slumped.
In Sweden, which has seen GDP growth of 6.1%, 3.9% and 0.8% over the past three years and is...
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