Adjustments lifecycles 2025
BeFrank invests the pension of your employees in lifecycles. We closely monitor developments and results per lifecycle. This includes looking at economic developments and the performance of the funds. At the end of last year, we made adjustments to amongst others the Active Lifecycle. As of 1 September, we will be using a new investment strategy for this lifecycle. In addition, we have set up our own fund in the Passive Lifecycle and we are refining our policy with regard to sustainable choices in our investments.
What do we see in the market?
In the first quarter of 2025, the U.S. government’s import tariffs led to unrest in the financial markets. It also led to more stock market fluctuations and fluctuating investment results, particularly in the case of investments in equities. In the second quarter, this unrest abated, despite ongoing geopolitical tensions and uncertainty about US trade policy. Due to the increased volatility in the markets, diversification of investments in equities is becoming increasingly important.
What will we adjust in the Active and Passive Lifecycles?
Active Lifecycle
At the end of 2024, we informed you about a temporary adjustment to the Active Lifecycle. A few companies showed very good returns, which was decisive for the market. In the short term, we responded appropriately to underperformance in a market where many active equity-oriented strategies are still struggling. As a result, we quickly achieved a broader diversification and the largest part of our equity portfolio remained actively managed.
As of 1 September, we use a new investment strategy for the equity portfolio in the Active Lifecycle. An important starting point is to limit risks by increasing diversification. We will invest in more different companies, always with the aim of beating the market in the long term. We will use a quantitative investment strategy for this purpose. This means that the asset managers will analyse a large amount of data on behalf of BeFrank and use this to choose which companies we invest in. In this way, we want to limit deviations from the market, both positive and negative. This will limit the risks.
Passive Lifecycle
Last June, we transferred the developed market equities from the Passive Lifecycle to our own fund, the NTCM World Journey Equity Fund. A new own fund for emerging market equities will follow shortly. With its own fund, BeFrank will be in full control of the investment policy. Among other things, we will focus more on sustainable investment choices, such as reducing CO₂ emissions. Without this detracting from the expected long-term return. After all, the main starting point remains to follow the market. The fees for the Passive Lifecycle will remain the same.
How will we incorporate sustainability into our investments further?
For BeFrank, sustainability is a key consideration in investing, as long as a good balance is maintained between risk and return. We aim for lower CO2 emissions and improved ESG scores of our investments. For example in the NTCM World Journey Equity Fund, we aim for a reduction of 50% CO2 emissions and a 10% higher ESG score compared to the benchmark (MSCI World Index). The ESG score assesses how well a company deals with the environment, society and good governance.
We also use other resources to make an impact on our investments. For example, asset managers vote for BeFrank at shareholders’ meetings (‘voting’) or enter into a conversation on our behalf with companies in which we invest (‘engagement’). Both have been going on for some time, but we will now refine our policy in this regard. This means, among other things, that we will pay more attention to the climate policy of companies when voting. Companies that emit a lot of greenhouse gases, for example, may have a vote against it because they do not have a clear climate plan for reducing emissions and they are not open about their climate policy.
What will employees notice about the changes?
Employees will not see a change in funds. The adjustments to the investments will be implemented within the existing mixed funds of the lifecycles. This ties in with our role to make adjustments in the interests of our participants. The aim is to achieve better and more stable investment results in the long term, and therefore a better pension for employees.