Ei dian otsikkoa

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Cross-border investment - wishful
thinking? Eeva Grannenfelt Vice
President, Capital Markets Pension
Fennia
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Cross-border investment - wishful thinking?
AGENDA Pension Fennia Investment
strategy Allowed asset classes
Efficient frontier Equity strategy
Fixed income strategy Expectations on
IR-personal Corporate Governance
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Cross-border investment - wishful thinking?
PENSION FENNIA In Finland the employer is
obliged to arrange pension benefits for his
employees by taking out insurance in a private
pension insurance company or by establishing 1 a
pension fund. 6 pension insurance companies
in Finland. The market share of Pension
Fennia is approximately 10 . The Finnish
statutory earnings-related pension scheme is a
partially funded scheme. Roughly 3/4 of the
premiums are used immediately to pay pensions
while the rest is funded for the future.
Pension Fennia is a part of The Fennia Group.
Joint field organisation provides clients with
all non-life, pension and life insurance
services.
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Cross-border investment - wishful thinking?
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Cross-border investment - wishful thinking?
Allowed asset classes Equities (Pan-Europe,
USA, Asia including Japan) Fixed Income
(USA, EURO-land, Sweden, U.K.) Real
estate Customer loans
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Cross-border investment - wishful thinking?
INVESTMENT STRATEGY Increase the share of
equities Increase the share of credit
risk Increase private equity and other
alternative assets classes
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Cross-border investment - wishful thinking?
Efficient frontier Maximise return with
accepted risk level Try to achieve optimal
long term allocation of
assets
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Cross-border investment - wishful thinking?
EFFICIENT PORTFOLIO AND CHANGES OF PROTFOLIO
7.10
21
19
7.00
6.90
10/99
7/99
6.80
5/99
6.70
Expected return,
12/98
6.60
6/98
6.50
6.40
6.30
6.20
4.00
4.50
5.00
5.50
6.00
Volatility,
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Cross-border investment - wishful thinking?
EQUITY STRATEGY CORE AND SATELITIES
Global
Global
Pharma
Active
Global
Techno
Asia
Small
8
Caps
(4 )
USA
12
(5 )
Global
Emerging
Telecom
markets
Finland
55
Nokia
(70 )
Pan-Europe
Sonera
25
33
(21 )
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Cross-border investment - wishful thinking?
SHARE OF INTERNATIONAL DIVERSIFICATION AND
EXPECTED RISK
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Cross-border investment - wishful thinking?
16
14
12
10

DJ STOXX
8
DJ EURO STOXX
6
4
2
0
Auto
Bank
Media
Retail
Energy
Telecom
Chemical
Service
Service
Service
Beverage
Insurance
Healthcare
Technology
Recources
Construction
Power Suppliers
Financial Services
Food
Basic
Cyclical Goods
cyclical Goods
Industrial Goods
-
Non
SECTORS
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Cross-border investment - wishful thinking?
25
20
15
DJ STOXX-50

DJ EURO STOXX-50
10
5
0
Bank
Auto
Media
Retail
Energy
Service
Service
Telecom
Chemical
Service
Beverage
Insurance
Healthcare
Technology
Recources
Construction
Power Suppliers
Financial Services
Food
Basic
cyclical Goods
Cyclical Goods
Industrial Goods
-
Non
SECTORS
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Cross-border investment - wishful thinking?
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Cross-border investment - wishful thinking?
Fixed income strategy Corporate credit new,
but growing asset class Only large and rated
companies USA trend
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Cross-border investment - wishful thinking?
FIXED INCOME MORE CREDIT

80 AAA-AA
20 AAA-BBB
12/1999
(ex. government)
euro/government
minimum 30 AAA-AA
max
.
max
.
Long term
max. 70 AAA-BBB
euro/government
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10
(ex. government)
High Yield
Benchmark EFFAS, all euro governmet bonds
International
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Cross-border investment - wishful thinking?
EXPECTATIONS ON IR-PERSONAL 1) As means of
competition consistent shareholder value an
important factor 2) Sufficient and essential
information - company - division -
sector 3) Annual and quarterly reports -
history - expectations 4) Personal contacts
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Cross-border investment - wishful thinking?
EXPECTATIONS ON IR-PERSONAL 5) Compensation
systems - option schemes - other
benefits 6) Public relations is part of our
corporate government system
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Cross-border investment - wishful thinking?
CORPORATE GOVERNANCE The mission of Pension
Fennia Ethical principles Return and
risk expectations (diversification and used
indices) Co-operation with company
management Voting in annual
meetings Board of directors Dividend
policy Compensation systems Co-operation
with other shareholders
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Cross-border investment - wishful thinking?
Monitoring systems Legislation and other
authorities Other interest groups Company
auditors Internal auditors and monitoring
systems Company meetings (road
shows) Analysts comments Using our voting
right Going exit (sell your stocks)
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Cross-border investment - wishful thinking?
How to monitor companies outside Finland Exit
(sell your stocks) Proxy voting Voting
through internet Using of corporate
monitoring companies Co-operation with other
owners
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Cross-border investment - wishful thinking?
As a Nordic institutional investor we have to
keep in mind after 1.1.1999 The group of
potential investors has increased
significantly Indexation only big well known
names gt more demands are made on investment
and management policies