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Portfolio information

In P+ we have a robust and diverse portfolio.

In P+ you get a robust portfolio consisting of many different assets which spans investments in shares, bonds and real estate etc. The purpose is to ensure a good return/risk balance in different market trends.

The majority of the pension fund's members have their savings invested in P+ Balance. The product consists of a well-diversified portfolio with a modest risk and expected return where the risk profile remains the same throughout life.

Members under P+, former JØP with guaranteed benefits and members under P+, former DIP Regulations 1 and 2 have their pension savings in P+ Grundlag. The investment strategy for P+ Grundlag is based on a high level of security in order to meet the guaranteed benefits. Accordingly, P+ Grundlag only consists of bonds, specially secured loans and credit investments with a high level of security as well as derivaties for the purpose of interest rate hedgning. 

Members under P+ Regulations 2019 and P+ Regulations 2011, former DIP Regulations 4 may choose between 3 risk profiles for their savings products: P+ Aktiemax, P+ Vælger and P+ Obligationsmax.

 

P+ Aktiemax is a diversified portfolio with a high level of shares, and accordingly it is  also the most risky savings product. The risk profile remains unchanged throughout life.  

 

P+ Vælger coincide with P+ Balance. The product consists of a well-diversified portfolio with a moderate level of risk and expected return. The risk profile remains unchanged throughout life.

 

P+ Obligationsmax is a diversified portfolio with a high level of bonds, and accordingly it is the least risky savings product. The risk profile remains unchanged throughout life. 

P+ Life cycle is a new market rate product which gives you the possibility of chosing the risk profile that matches your life situation.

 

All new members are admitted under P+ Life cycle from 1 November 2021. We expect that the first members with an average rate product are offered the possibility to opt for P+ Life cycle and P+ Sustainable in 2023. You will get a letter in e-Boks with more information.

 

With P+ Life cycle you can choose between three risk profiles: Low, Middle and High. The more risk you take, the higher pension benefits you may have, but you must also expect larger fluctuations with a high risk profile. 

 

In general, all new members are admitted with Middle risk. On Min pension you can choose a different risk profile and be guided to which risk profile that suits you better. 

 

Regardless of the chosen risk level, we are gradually reducing the investment risk from age 54 and until you start payment of your pension benefits. The gradual reduction is made to reduce the risk of your savings being significantly affected if the financial markets develop negatively in the years before you retire or while you are receiving pension benefits. This way, P+ Life cycle provides the possibility of obtaining a higher return when you are young, and at the same time reducing the risk of large fluctuations in the years before you retire and while you are receiving pension benefits. 

 

Your savings are invested in funds depending on the chosen risk profile. The funds are valued based on the market value of the underlying assets according to the fair value principle. 

 

Payments made are normally traded within 5 banking days and no later than 20 banking days after P+ has received the payment. Received payments that are not yet traded are paid an interest rate determined by P+. The interest rate is 0 percent at present.  

 

If your pension savings are paid wholly or partially on your death, the accompanying pension savings are traded and the realised amount is paid an interest rate determined by P+. The interest rate is 0 percent at present. 

Asset allocations

You can read more about both the strategic and the actual asset allocation applying to P+ Life cycle here and compare these and the risk of P+ Life cycle with other pension companies' market rate products. Here you can also see the average risk applying to comparable pension products. 

This tool is developed by Insurance and Pension Denmark which is the Danish trade organisation for insurance companies and pension funds. The asset allocations applying to the other products i P+ appear below. 

Strategic asset allocation
In below tables you can see the strategic asset allocation at 31 december 2021 for the different investment products. 

  P+ Balance P+ Aktiemax P+ Vælger P+ Obligationsmax P+ Grundlag
Government and mortgage bonds 21.0 % 5.0 % 21.0 % 34.0 % 20.0 %
Investment grade bonds 19.0 % 14.0 % 1.0 % 23.0 % 80.0 %
High-yield bonds 20.1 % 25.0 % 20.1 % 16.0 % 0.0 %
Emerging market government bonds 6.0 % 6.0 % 6.0 % 6.0 % 0.0 %
Global shares (developed markets) 36.0 % 69.0 % 36.0 % 9.0 % 0.0 %
Emerging market shares 5.5 % 11.0 % 5.5 % 1.0% 0.0 %
Private equity 4.0 % 4.0 % 4.0 % 4.0 % 0.0 %
Infrastructure 6.0 % 6.0 % 6.0 % 6.0 % 0.0 %
Real estate 10.0 % 10.0 % 10.0 % 10.0 % 0.0 %
Hedge funds 6.0 % 6.0 % 6.0 % 6.0 % 0.0 %

 

Actual asset allocation
In below tables you can see the actual asset allocation at 31 December 2021 for the different investment products.

  P+ Balance P+ Aktiemax P+ Vælger P+ Obligationsmax P+ Grundlag
Government and mortgage bonds 28.3 % 4.5 % 28.3 % 47.9 % 30.3 %
Investment grade bonds 8.7 % 3.1 % 8.7 % 13.4 % 74.8 %
High-yield bonds 16.5 % 21.5 % 16.5 % 12.3 % 0.0 %
Emerging market government bonds 4.5 % 4.5 % 4.5 % 4.5 % 0.0 %
Globale shares (developed markets) 41.7 % 73.9 % 41.7 % 15.1 % 0.0 %
Emerging market shares 5.0 % 10.3 % 5.0 % 0.7 % 0.0 %
Private equity 3.9 % 3.9 % 3.9 % 3.9 % 0.0 %
Infrastructure 4.5 % 4.5 % 4.5 % 4.5 % 0.0 %
Real estate 10.6 % 10.5 % 10.6 % 10.7 % 0.0 %
Hedge funds 3,1 % 3.1 % 3.1 % 3.2 % 0.0 %

The exposure of the individual investment profiles does not total 100 percent as the pension fund uses cost effective financial instruments for the purpose of achieving the wanted risk level.

The actual allocation of assets may deviate from the strategic asset allocation within a framework laid down by the Board. Depending on the market terms there may be periods where some active classes are more or less attractive to invest in. 

Asset classes

Below you can read more about the asset classes.

Government and mortgage bonds are characterized by being very secure investments with a high credit rating, but also an expected low return. It can be both Danish and foreign bonds, but they must be from developed countries with a good rating (≥BBB-). The duration is approx. 6 years.

 

Bonds often serve as a good insurance in bad times when the equity markets are struggling. They have well-diversified characteristics in an investment portfolio as they increase the robustness and even out fluctuations with time. 

 

Investment grade bonds are corporate bonds with a relatively high credit rating (≥BBB-). They serve well in an investment portfolio because of their attractive return/risk correlation. Generally, investment grade bonds involve a higher degree of risk compared to state and mortgage bonds, however, not as much as High yield bonds (see below).

There are both liquid and iiliquid investment grade credit. The liquid investment grade credit is relative easy to trade, while the illiquid investment grade credit is more difficult to trade and virtually impossible in some market environments. The latter category includes a premium as compensation for the lower liquidity.

High yield bonds are corporate bonds with a low credit rating (≤BBB-). High yield bonds are also described as ‘junk’, however, this is not quite accurate, as high yield bonds simply are speculative or riskier bonds. 


It might be illiquid investments which are difficult to realise in a falling market. Examples are senior bank loans, credit derivatives, CLOs, structured credit and loans to infrastructure projects, real estate projects or companies in distress. High yield bonds are characterized by an attractive return, but also a high risk and are legitimate in a robust investment portfolio due the correlation between return and risk.

 

There are both liquid and iiliquid investment grade credit, where the liquid investment grade credit is relative easy to trade, while the illiquid investment grade credit is more difficult to trade and virtually impossible in some market environments. The latter category includes a premium as compensation for the lower liquidity.

Government bonds from developing countries typically have a lower credit rating than corresponding bonds from developed countries, and it is the sovereign risk that the pension fund as an investor is paid for. Bonds in this category typically generate a high return, but they do not provide 'protection' in a time with e.g. a substantial fall in equity prices. 

 

Emerging Market bonds can be issued in either EUR or USD (hard currency) or in the individual country’s local currency. As the different countries’ economies are maturing, the emerging market countries are increasingly issuing their bonds in local currency. When P+ invests in local currency, the pension fund is exposed to a considerable currency risk.

Listed shares from developed countries typically constitute a substantial part of an investment portfolio. Shares are basically an ownership interest in a limited company.

Shares are somewhat riskier compared to bonds, on the contrary they generate a higher return long-term. Accordingly, shares are well suited investments in a portfolio with a long-term investment horizon.

 

The return on shares is paid in the form of dividends and market value adjustments. Shares from developed countries are very liquid and easy to trade in a cost-effective way. Accordingly, they are suitable for controlling the tactical risk of the portfolio.

Throughout the past decades, listed shares from developing countries have become an increasingly important element in a well-diversified investment portfolio. The return is expected to exceed the return of shares from developed countries, but the risk is also considerably higher.


It is expected that the developing countries will catch up with the developed countries with time which must be reflected in the share prices. However, the political risk is essential and may from time to time overshadow the positive underlying tendency. In times with high market instability, shares from developing countries are extremely vulnerable. 

Unlisted equities are attractive due to the illiquidity premium which can be gained by tying up capital in funds that develop companies in a short period. Unlisted equities are expected to generate a higher return than listed equities. As an investor you can typically not withdraw your money from the fund, and the only possibility is to sell the ownership interest with a large discount. This is not desirable, and accordingly you must be certain that you can keep the investment until maturity.

Unlisted equities typically involve a high risk, but it is often difficult to measure this risk precisely. The predominant part of the capital funds are geared which increase the risk. Private equity belongs to the category Alternative investments.

Infrastructure is also attractive due to the illiquidity premium which can be gained by tying up capital in construction projects which give a stable cash flow. Infrastructure is expected to generate a higher return than bonds, but lower than e.g. unlisted equities. As the turnover in infrastructure is low, it can be difficult to calculate the true risk, but the price typically drops in times with recession. Infrastructure is a relatively broad category consisting of e.g. energy and water supply, transportation, social and digital infrastructure and forest. 


Forest investments may be attractive in a broad-based portfolio and contribute to stabilising the return. They are not affected by fluctuations on the equity markets and are driven by other factors than real assets in general. The pension fund invests in forest through forest funds together with other investors. 

Real estate includes residential and commercial properties, building sites etc. The return on real estate investments is generated from surplus related to renting and value increases. Real estate investments protect against inflation as both rentals and property value tend to follow the ordinary development in prices and wages.

P+ invests primarily in real estate through funds which ensures a diversifaction to both property types, countries, continents and risk. The directly owned properties are managed in cooperation with DEAS.

Hedge funds are a broad category of managers who often search for a high risk-adjusted absolute return by way of using derivatives and gearing contrary to traditional funds which typically benchmark themselves relative to a market index - typically an equity or bond index - which they try to outperform.

 

Despite the name, a hedge fund does not necessarily need to hedge, and there is no precise definition of a hedge fund.

There may be a number of advantages by investing in hedge funds as you as an investor can obtain an exposure and return which you cannot generate yourself. Hedge funds often seem to be costly, but this is often evened out by a high return. It may make sense to have hedge funds in an investment portfolio as the risk often differs from the traditional asset classes.