Geopolitical tensions between the US and Iran triggered market adjustments, causing a slight drop in fixed

Andorra's pension reserve fund closed July with total assets of €2.0675 billion, down slightly amid market volatility tied to renewed US-Iran tensions.

The Fondo de Reserva de Jubilación (FRJ) saw its holdings fall from €2.0865 billion at the end of June, with officials citing pressures on fixed and variable income assets. The escalation of hostilities between the United States and Iran fueled concerns over sustained high interest rates, which dragged down fixed income holdings such as sovereign bonds and corporate debt. Variable income segments, including equities and investment funds linked to artificial intelligence, also corrected as investors questioned the long-term viability of major data centre projects.

The fund still achieved a year-to-date return of 4.4% through July 31, surpassing Andorra's 4.3% inflation rate and aligning with its mandate to beat inflation over time. Over the past 12 months, performance stood at 7.8%.

Since launching in 2012, the FRJ has grown by €1.155 billion, bolstered by €475.7 million in pension surpluses and €679.4 million from investment returns. Its overall return from December 31, 2012, to July 31 reached 56%, well ahead of the 29.3% inflation increase in that period.

Assets were allocated with 60.3% in cash and fixed income—primarily short-term options like money market funds, commercial paper, term deposits, and current accounts—30.4% in variable income such as listed shares, ETFs, and funds, and 9.3% in illiquid assets and private equity.

No figures for August have been released.