NETHERLANDS - Diversification was the main reason the cabin staff and pilots KLM pension funds allocated 5% of their fixed income portfolios to long term UK corporate bonds, according to Blue Sky Group.
Justus-van halewijn, head of investment strategy and research at Blue Sky Group which manages the funds, said the new mandates would follow a passive investment style.
In addition to diversification, van halewijn said the decision was also made because there are many long dated bonds available which match the liabilities of the KLM funds.
It was also felt the size and quality of the UK credit market warranted an investment, said van halewijn.
He added that a total of 38.5% of the cabin crew’s assets was invested in fixed income, while the flying staff’s pension fund invested 51.7% in the asset class. In terms of the pension fund for ground staff, 42.5% was allocated in fixed income.
The KLM pension fund for cabin staff is worth €1.2bn, the pilots’ fund is valued at €5.6bn and the pension portfolio for KLM ground staff has assets under management of €4.9bn.
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