Long-term pension products with impact components for sustainable development tend to perform better than comparable conventional investments. This is the conclusion of a study conducted by researchers at the University of Liechtenstein as part of the “LAB on Sustainability, Prosperity, Provision” on a representative selection of pension portfolios with a European or global focus.
The LAB on Sustainability, Prosperity, Provision was founded in April 2024 as a cooperation project between the University of Liechtenstein and “the prosperity company AG”, the specialist provider of innovative prosperity planning and pension solutions. The focus is on researching the effects of impact investments in the context of various investment portfolios as well as the management options for profitability, risk diversification and improvements for people and the environment.
The empirical analyses of the current study show that fund portfolios with impact components for a global and a European investment focus tend to have a better financial performance compared to their benchmarks with exclusively conventional investments after filtering with regard to the total expense ratio of the funds. In the study, both SFDR Article 8 and Article 9 funds outperformed their peer groups. Additional performance improvements were achieved by funds with an ESG rating above 70. Simulated client portfolios based on the study results also showed that impact components generally have a positive effect on the performance of pension products. Overall strategies that selected funds according to SFDR classification, low total costs, diversification and available fund selection achieved the best risk-return ratio according to the study.
As part of the research project led by Prof. em. Dr. Marco Menchetti and Dr. Othar Kordsachia, representative of the Chair of Sustainable Finance and Investments, the effects of impact investments as components of various investment portfolios are being scientifically investigated and recommendations for action derived on an empirical basis. The prosperity company AG is participating in the project as an exclusive partner, providing financial support, expertise and other resources in order to use the results to develop innovative new approaches for profitable and sustainably balanced wealth management.
Christoph Böckle, CEO of the prosperity company AG, explains: “Thanks to the collaboration with the renowned University of Liechtenstein as part of the LAB on Sustainability, Prosperity, Provision, we were able to gain scientific evidence for our portfolio approach: Sustainable investments pay off twice over, especially when it comes to retirement provision and wealth creation: For reliable returns and for our planet.”
Dr. Othar Kordsachia, Assistant Professor and representative of the Chair of Sustainable Finance & Investments, adds: “With the joint LAB, the Chair of Sustainable Finance & Investments and the prosperity company AG brought together academic expertise and practical application to develop future-oriented solutions for sustainable pension provision. The results show which criteria are best suited for fund selection in order to achieve a sustainable investment strategy.
About the prosperity company AG
The digital financial group prosperity was founded in 2016 around the future-oriented life insurance company Liechtenstein Life Assurance AG. With innovative ideas and solutions, it is developing a holistic digital ecosystem for high-yield retirement, wealth and succession planning.
In addition to Liechtenstein Life, prosperity solutions AG completes the Group's value creation as an innovative insurtech hub for the acquisition and support of sales partners and the management of end customers. As the holding company, the prosperity company AG ensures the efficient administration and strategic management of the investments.
With a network of over 1,000 sales partners, the prosperity group serves around 100,000 end customers. Over 120 employees in Liechtenstein, Zurich, Berlin and Lisbon have kept the group of companies on a constant course for success for years with forward-looking solutions.
The report can be viewed here: bit.ly/TPC_UNI_Report
