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The impact of plan and sponsor characteristics on pension funds’ asset allocation and currency diversification

Author

Listed:
  • Laurens Defau

    (Faculty of Economic and Social Sciences & Solvay Business School
    Research Foundation—Flanders (FWO))

  • Lieven De Moor

    (Faculty of Economic and Social Sciences & Solvay Business School)

Abstract

This paper presents new empirical evidence on the role of plan and sponsor characteristics in pension funds’ investment decisions. In this research, we analyzed the portfolio allocation of 182 Belgian pension funds over the period 2001–2015. The results indicate that larger pension funds and pension funds with more active participants have better diversified equity portfolios. Furthermore, we show that pension funds in which employers pay higher contributions take more aggressive investment decisions; however, pension funds in which employees pay higher premiums take more conservative investment decisions. Finally, our findings suggest that corporate culture and performance parameters affect the investment behavior of pension funds.

Suggested Citation

  • Laurens Defau & Lieven De Moor, 2018. "The impact of plan and sponsor characteristics on pension funds’ asset allocation and currency diversification," Journal of Asset Management, Palgrave Macmillan, vol. 19(1), pages 27-37, January.
    • Handle: RePEc:pal:assmgt:v:19:y:2018:i:1:d:10.1057_s41260-017-0058-3
    DOI: 10.1057/s41260-017-0058-3
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    References listed on IDEAS

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    Cited by:

    1. José Luis Iparraguirre, 2020. "Economics and Ageing," Springer Books, Springer, number 978-3-030-29019-1, June.
    2. Hlobil, T.M. & van Leuvensteijn, M., 2020. "Combining investment advice and asset management," Economics Letters, Elsevier, vol. 197(C).
    3. Laurens Defau & Lieven De Moor, 2021. "The investment behaviour of pension funds in alternative assets: Interest rates and portfolio diversification," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 1424-1434, January.

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