Andorra's Pension Fund Hits Record €2.05 Billion Amid Market Recovery

Andorra's Fons de Reserva de Jubilació (FRJ) reached a record €2.051,4 million in assets under management as of 31 May, surpassing previous highs after recovering from market turbulence linked to US and Israeli strikes on Iran.

The fund grew by €46,7 million from April levels and €83 million compared to the end of 2024, according to its latest monthly report. Managers highlighted ongoing negotiations to reopen the Strait of Hormuz, which lowered oil prices and lifted financial market confidence in a possible conflict resolution. Strong gains in the technology sector, driven by advances in artificial intelligence, further supported the upturn.

The portfolio posted a 4% return over the first five months of the year, with a 12-month trailing return of 8.9%. While this year's performance lags Andorra's inflation rate of nearly 5%, the fund has consistently outperformed inflation over the longer term—a legal requirement. Since 2012, it has delivered 55.4% returns against cumulative inflation of 30.4%, with total growth of €1.139 million. This includes €467,7 million from pension branch contribution surpluses and €671,3 million from investment returns by the fund and external managers.

The allocation remains conservative: 58.1% in monetary assets and fixed income, primarily short-term instruments such as money market funds, commercial paper, term deposits, current accounts, and sovereign or corporate bonds. Equities—through listed stocks, ETFs, and investment funds—account for 32.9%, while illiquid assets and private equity make up 9%.

Despite persistent Middle East tensions, the FRJ sustained its positive momentum through May.