Andorra Retirement Fund Ends March at €1.951 Billion Amid -1.1% Loss from Middle East Tensions

Andorra's Retirement Reserve Fund (FRJ) closed March with €1.951 billion in assets, reflecting a -1.1% monthly return and year-to-date performance, primarily due to market volatility from the Middle East conflict.

The €60 million unrealised loss stemmed from moderate but widespread declines across global financial markets amid heightened geopolitical uncertainty. Elevated energy prices from reduced supply have fueled inflation concerns and raised questions about the current macroeconomic cycle's stability should tensions persist. The fund's monthly report highlights that assets most sensitive to international swings bore the heaviest impact, though it notes equities have historically rallied in the 12 months following similar conflicts.

February's assets stood at €2.012 billion—surpassing €2 billion for the first time—before the drop, with year-end 2023 levels at €1.967 billion. The March total breaks down to €571 million in accumulated surpluses from the CASS pension branch and €467.7 million in investment returns. One breakdown includes an additional €912.4 million in prior deposits. The portfolio remains diversified: 59.8% in fixed income and cash equivalents, 30.7% in equities, and 9.5% in alternatives.

This reversed February's +2.2% gain but kept returns above Andorran inflation, aligning with legal mandates. Long-term metrics demonstrate ongoing strength: 5.8% over 12 months, 20.2% over three years, 17.6% over five years, and 36.5% over 10 years. Annualised volatility over the past five years measures 5.4%. Since December 2012, cumulative returns total 47.8%, outpacing Andorra's 29.0% CPI increase in the same period.

Fund managers describe the downturn as a temporary response to external pressures rather than a fundamental weakness, maintaining emphasis on long-term outperformance against inflation.