Do the events in Ukraine affect the investments of Philips Pensioenfonds?

3 March 2022

Investing pension money is necessary to be able to offer you a good pension. That is why the assets of Philips Pensioenfonds are invested. We can imagine you are wondering whether the current events in Ukraine are affecting the Fund's investments. The answer to this question is affirmative. In this news item we will give you more information about this.

We are monitoring the situation closely

In this message we explain what the financial effects are on the Fund of the events in Ukraine. A lot is still uncertain at the moment, we are monitoring the situation together with our asset manager. We will take action if developments give a reason to do so. 

Small amount invested in Russia and Ukraine

Philips Pensioenfonds has a small amount invested in Ukraine and Russia. As a result, the direct effect of the events in Ukraine on the portfolio is minimal. In total this concerns less than 0.1% of all investments of the Fund. Most of this is invested in Ukraine. Only 0.01% of the portfolio is invested in Russian companies. In Russia, Philips Pensioenfonds only invests in companies. The Fund does not invest in Russian state-owned companies or government bonds. In Ukraine, the Fund has investments in companies and government bonds.

Investments in Russia removed from the benchmark in March

The equity portfolio of Philips Pensioenfonds is passively invested. This means that we invest our portfolio exactly according to a certain benchmark. In this case, it is the MSCI Emerging Markets Index. In March, companies listed on the Russian stock exchange are removed from this benchmark by MSCI. That means we're going to sell these shares. 

Uncertainty in financial markets

The events are creating more uncertainty in financial markets worldwide. Of course, this also indirectly affects the investments of Philips Pensioenfonds. For example, investments with a higher risk profile, such as equities, suffer from this uncertainty. In addition, we see that inflation expectations are increasing, because those expectations are partly driven by energy prices and Europe is dependent on Russia for part of its energy supply. Higher inflation is not beneficial for pension funds, because it means more money is needed to maintain purchasing power.