KPST implements an additional investment strategy

The Kosovo Pension Saving Trust (KPST), aiming to advance the interest of its participants through management of investment risk, long-term investment return and preservation of accumulated assets, has implemented an additional investment portfolio. KPST believes that as risk tolerance and investment horizons change for participants over time, the investment strategy and respective portfolios should also be adapted.

KPST had started from February 2022 to invest pension assets in two investment strategies divided into:

1) Standard Portfolio for participants up to 62 years old;
2) Conservative Portfolio for participants aged 63 and over.

Beginning in April 2024, KPST has started investing funds through an additional strategy named the Balanced Portfolio, designed for participants aged 58 to 62 years old, thus adapting the investment risk even more to the age of the participants.

– The Standard Portfolio, i.e. the central strategy, will have a higher exposure to equities as this provides opportunities for higher returns in the long-term considering the age of the participants (up to 57 years old), thus leaving room for undertaking higher investment risk. In addition to equities, this portfolio will also have investments in bonds (in Kosovo and abroad), multi-assets, real assets, money markets, and bank deposits.

– The Balanced Portfolio will serve as a transitional strategy from the standard to the conservative portfolio. It will have lower exposure in equities than the Standard Portfolio, but more exposure to bonds (in Kosovo and abroad), multi-assets, money markets or bank deposits, aiming for lower risk than the standard strategy but higher return than the conservative strategy. The number of participants who will become part of the Balanced Portfolio is over 40 thousand, with a total of over 300 million euros in pension savings.

– The Conservative Portfolio has no major changes, as it continues to have the vast majority of investments in bonds (in Kosovo or abroad), but there may also be placements in the money markets, bank deposits and a very low portion in equities. With this composition, the strategy is expected to offer much less investment risk, which is suitable for participants of pre-retirement age (63+), during which time it will be aimed to have steadiness for the accumulated pension savings.

With the implementation of the third investment strategy, the KPST Governing Board concluded a very important cycle of advancing and adapting investment policies to the age of the participants foreseen by the Law on Pension Funds of Kosovo and as recommended by the pension industry as good practice.