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Portfolio strategy and asset classes
Portfolio strategy
At the beginning of 2008, the management of the Foundation’s financial portfolio was completely reorganised. Thereby, the income objectives were defined on the basis of the planned funding volume, the corresponding administrative costs and the inflation adjustment required to preserve the value of capital. The outcome was a target yield equal to the rate of inflation plus 3%. The intention is to spread risk as widely as possible by investing in diverse asset classes: shares, bonds, property, commodities and absolute return funds. This is designed to ensure that the target income is achieved with the minimum of volatility.
The basic principle is to "steer with a steady hand", and this should make it possible to generate target incomes above the long-term average. Short-term negative price swings will not immediately lead to adjustments.
Asset classes
The assets of the Foundation, which amounted to about EUR 420 million at 31 December 2009, are invested as follows:
| Category | % |
| Liquid funds | 2.00 |
| Company bonds | 10.00 |
| Government bonds | 15.00 |
| Held-to-Maturity Securities | 30.00 |
| Inflation-linked bonds | 8.00 |
| Shares worldwide (incl. emerging markets) | 6.00 |
| Shares Europe | 7.00 |
| Property worldwide | 10.00 |
| Absolute return funds | 8.00 |
| Commodities (non-agricultural) | 3.00 |
| Microcredits | 1.00 |
| TOTAL | 100.00 |
Shareholders' equity
The Foundation was established with initial capital of DM 700 million (EUR 357.9 million), which was set aside in order to finance project support activities. These assets are invested on the international financial markets. The graph shows how the value of the Foundation’s capital has developed since 2000.
Further information
- Facts and figures about the Foundation EVZ
