The General Pension Fund’s investment strategy for 2024 was approved by the fund’s board on November 28, 2023.
The investment policy is published in its entirety on the fund’s website, see here. The strategy is detailed, but in it you can read about the structure of the fund and methods of return, the historical long-term return of asset classes which is the core of the strategy for asset composition, economic prospects and expected returns, investment strategy and tolerances, limitations and criteria. Policy on responsible investments, ownership policy, credit rules and an extract from the Monitoring System with Risk are accompanying documents with the investment policy.
The main changes from the 2023 investment strategy are the following:
- Insignificant changes are made to the investment strategy of yield channels between years. However, the tolerances of individual asset classes in the policy of mixed collections have been reduced.
- Section IV on Investment Policy discusses the limitations that apply to minimum insurance coverage and additional insurance coverage. It states that the maximum weight in financial instruments issued by the City of Reykjavík and the Municipal Loan Fund as a percentage of the total assets of yield channels has been reduced from 7.5% to 5%, in line with other issuers of financial instruments. This rate was also 5% for registered issuers of real estate-backed bonds, but has now been increased to 7.5% due to market conditions.
- Chapter V discusses the criteria taken into account when choosing securities. It now states the authorization for investments in convertible bonds of companies and subordinated bonds of banks, if certain conditions are met. The conditions for investments in municipal bonds have also been clarified in more detail.
- The General Pension Fund’s policy on responsible investments and ownership policy are confirmed separately by the board. Insignificant changes are made to the policies between years.
