The Pension Fund of the Icelandic Commercial Pilots' Association (EFÍA), which is managed by Arion Bank Asset Management, will increase its exposure to foreign equities in 2025.

The decision was made at a meeting of the board of directors in November 2024, where it signed a new investment policy for 2025.

“In recent years, emphasis has been placed on increasing the weight and risk diversification of foreign assets. The new policy continues this path, but the main changes are that the weight of foreign equities is increased while the weight of domestic and foreign bonds is reduced,” the pension fund said.

It added that this will help to achieve higher long-term return.

The fund's asset class allocation targets change as follows: Domestic bonds will decrease from 43 per cent to 41 per cent; domestic stocks unchanged at 12 per cent; domestic specialised investments unchanged at 5 per cent; foreign stocks will increase from 25 per cent to 28 per cent; foreign bonds will decrease from 5 per cent to 4 per cent; and, foreign specialised investments unchanged at 10 per cent.

The pension fund also published its results for 2024, in which it generated a nominal return of 11.6 per cent (market value) and 6.5 per cent (real return).

In addition, the pension fund's long-term returns are profitable, for example, EFÍA's 10-year nominal return on an annualised basis has been 8 per cent and the real return 3.6 per cent.

“The year 2024 was both eventful and challenging. It was characterised by high interest rates and falling inflation. Despite great uncertainty due to fiscal policy, civil unrest, collective bargaining agreements and elections, the year ended fairly well on the securities markets,” the pension fund stated.

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