On 1 April 2025, PFA will launch three new investment profiles (Profile Low, Medium and High), which will replace the current four investment profiles (A, B, C and D) in market interest. The aim is to improve customers’ finances and payouts in retirement through strong long-term returns. Over the autumn of 2024, PFA will inform all customers about the changes and what this means for their profile.
Over recent years, PFA has created some of the market’s best returns for its customers, and this is also the goal going forward. Therefore, PFA has developed three new investment profiles with an optimized design, which should give customers an even better long-term return. This is according to PFA’s investment director, Kasper A. Lorenzen.
“One of our absolutely most important tasks is to ensure customers financial security in retirement through good long-term returns. Therefore, we have developed three new investment profiles which, according to our assessment and analysis, will strengthen the customers’ expected returns throughout their lifetime. With the profiles, we are building on the extensive experience we have gained since we launched our market rate product, PFA Plus, around 15 years ago”.
The shares win in the long run
In the three new profiles, among other things, the share of shares has been increased – especially while customers are working, saving and have a long time to retire. In this way, PFA wants to exploit the shares’ return potential, but without compromising the customers’ financial security and stability in retirement.
“Just like the current investment profiles, the new profiles are based on a life-cycle approach, where the share of shares becomes smaller as the customer approaches retirement. But the profiles will basically contain more shares, just as the share of shares will be scaled down over a longer period. Our analyzes show that in this way we can increase the customers’ returns and expected payouts without significantly affecting their security and stability in retirement”, says Kasper A. Lorenzen.
He elaborates that, with the new profiles, PFA has especially had an eye on the shares’ positive properties when looking at a long savings process, as is the case with saving for retirement.
“The shares can have some bad years and give greater fluctuations in returns than, for example, bonds. On the other hand, they have a tendency to come back strong. If you look at a time horizon of more than 10 years, shares provide a significant additional return compared to bonds, without necessarily increasing the investment risk. In a long-term perspective, you therefore risk missing out on yield gains if you do not have enough shares in your pension savings,” says Kasper. A Lorenzen.
He mentions that a typical client in PFA’s profile D, which is the most equity-heavy of PFA’s current four profiles, has been rewarded with cumulative returns of over 350 percent since its inception in 2009.
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