Pension funds are increasingly backtracking on bourse investments and are re-directing funds to bank deposits, the 2007 consolidated report of the Commission for Financial Supervision reads, as quoted by Dnevnik daily.

The trend is valid for universal and voluntary pension funds alike.

As of December 31 2007, the exposure of pension funds to equity and stakes in collective investment schemes totalled 664 million leva, a decrease from 700 million leva as of the end of September the same year. The sum represents half the assets under pension funds' management.

Yet the decrease is mainly attributable to the sagging valuation of equity in the latter months of the year amid the enduring downturn on the bourse. Only the pension funds of Allianz Bulgaria trimmed their stakes in several mutual funds.

Meanwhile, the share of banking deposits in funds' investment portfolio rose, although in nominal terms was on the decline. While at the end of September, banking deposits were worth 456 million leva, at the close of the year they totalled 362 million leva.

Experts named last year as the most dynamic for pension funds' portfolios, a situation mostly attributable to end-2006 amendments to the Social Security Code, which vested with pension funds more latitude in investment action.

Universal pension funds control the largest share of assets in pension funds' operation, at 336 million leva. Supplementary pension funds held 204 million leva as of the end of 2007. Although the funds are growingly inclined to invest abroad, their investments are still heavy on Bulgaria-based equity.

The companies to have ventured for expanding their portfolios with foreign financial instruments are Allianz Bulgaria, ING and Doverie.