The investment portfolio of the Vita Collective Foundation achieved a provisional net performance of 8.49% in 2021. The broadly diversified investment strategy, oriented towards long-term security, once again proved effective. Equities in particular, but also private equity, infrastructure and real estate investments contributed to the sound return. The net performance per year was 7.42% over the past three years, and 5.01% over the past five years.
Higher risk budget thanks to adjusted retirement provision model
The revised Vita Classic retirement provision model came into effect on January 1, 2021. It has a stabilizing effect on the cover ratio and therefore allows a higher risk budget. The Vita Collective Foundation therefore adjusted the strategic asset allocation accordingly. The equity exposure was increased. This strategy has paid off in the investment year 2021.
Focus on sustainability and currency hedging
The Vita Collective Foundation regularly adjusts its strategic asset allocation. In 2022, it will focus on reducing currency risks and on sustainability. Today, sustainable investments are an integral part of any investment strategy. The Foundation intends to pursue this path even more consistently: For example, it has formulated a carbon reduction target for its equity portfolio and is now investing in green bonds. The new foreign currency hedging strategy primarily increases the stability of the portfolio.
Indicative cover ratio of around 114%
The indicative cover ratio as of December 31, 2021, is around 114%. The Vita Collective Foundation was therefore able to build up additional value fluctuation reserves (previous year 108.5%). As of December 31, 2021, the target value fluctuation reserves of 12% were fully accumulated. The Foundation communicates the interest rates according to its retirement provision model one year in advance. In 2022, the retirement assets in the mandatory and the super-mandatory part will earn interest at a maximum rate of 2.50%. Customers with contracts commencing before January 1, 2018 will receive the last interest tranche of 0.40% from the previous pension model and thus a total interest rate of 2.90%.