The assets under management (AUM) of the eight Austrian corporate severance funds (BVK) increased by 2.57 per cent in the second quarter of 2024, the Financial Markets Authority Austria (FMA) has revealed.

AUM of the BVK funds amounted to €19.8bn at the end of Q2 2024, an increase of €495.6m (2.57 per cent) compared to the previous quarter and 6.16 per cent compared to the end of 2023.

The investment performance calculated by the Oesterreichische Kontrollbank for the second quarter of 2024 was 0.67 per cent but fluctuated between 0.09 per cent and 0.93 per cent, depending on the BVK.

In the first quarter of 2024, the performance had been 1.4 per cent, which resulted in a performance of 2.09 per cent for the first half of the year. On average over the past 10 years, a return of 1.44 per cent, per annum, was generated; the five-year average was 1.12 per cent, and the three-year average was -0.01 per cent.

The number of beneficiaries (including multiple entitlements with several BVKs) rose to 11.01 million (+50,000 or +0.45 per cent) in the second quarter. The average assets of an entitlement were around €1,798 as of 30 June 2024; a year earlier it was € 1,636.

Furthermore, in its interim report, the FMA noted that the mandatory capital guarantee, combined with payment requirements that fluctuate in line with labour market developments, necessitates – also legally – an investment policy that pays particular attention to security and liquidity.

At the end of the second quarter of 2024, the corporate severance funds invested their assets under management primarily in bonds (65.25 per cent), equities (14.95 per cent), loans and credits (5.58 per cent), real estate (5.71 per cent) and deposits with credit institutions (4.68 per cent); the remainder (3.83 per cent) was attributable to other assets. This means that the structure of the portfolio remained essentially unchanged compared to the previous quarter.

To secure the legally prescribed guarantee on the paid-in capital, BVK must form a capital guarantee reserve. Depending on the BVK, their value fluctuated between 0.63 per cent and 1.15 per cent of the total amount of entitlements in the reporting quarter and amounted to an average of 0.86 per cent for all; the same as in the previous quarter.

---