Armenia’s funded pension system is gradually expanding the range of its investments, moving beyond government bonds and bank deposits into the real economy and new technology projects.
According to Hrayr Aslanyan, Chief Investment Officer and Deputy CEO for Development at Amundi-ACBA Asset Management, the combined assets of the three pension funds managed by the company reached AMD 853 billion at the end of July. Around 66% of those assets are invested in Armenia’s economy, while the remaining 34% are placed in international markets.
Pension Investments Are Moving Beyond Traditional Instruments
According to Aslanyan, the investment policy of Armenia’s pension system has changed significantly in recent years.
In the early stages, domestic investments were concentrated mainly in government bonds and bank deposits. Today, fund portfolios also include corporate bonds, companies in the real economy, new issuers, money-market instruments and hedging products.
The funds currently hold direct investments in around ten non-financial companies.
A legislative amendment adopted in 2025 also allowed pension fund managers, under certain conditions, to invest up to 10% of their assets in illiquid instruments. Aslanyan said the new investment project was carried out under this framework.
$20 Million Invested in an Artificial Intelligence Data Center
Amundi-ACBA Asset Management’s first investment of this type involved an artificial intelligence data center.
According to Aslanyan, the three pension funds jointly invested the equivalent of $20 million in the project, representing about 1% of their total assets. The investment concerns a data center built in Hrazdan.
Before the investment decision was made, the funds assessed not only financial and economic risks but also technical, architectural and commercial risks.
Aslanyan said Amundi’s parent company and its partners provided significant support during the process.
Average Annual Returns Are Around 8%
Addressing investment performance, Aslanyan said 2022 was the only year in the past 12 years in which the pension funds posted a negative result.
The situation changed from the fourth quarter of that year, and the funds have recorded double-digit growth each year since then.
According to him, the average annual return over the past 12 years has been about 8.2%.
Aslanyan said that if a young person begins making regular contributions at age 20 and remains in the system for more than 40 years, the ratio of their pension to their final salary could theoretically reach 70–80% or even higher.
He described this replacement ratio as one of the main indicators of the effectiveness of a funded pension system.
Armenia Still Has Strong Demand for “Long-Term Capital”
At the same time, Aslanyan noted that Armenia’s capital market is not yet fully developed and that the shortage of suitable investment opportunities continues to limit the expansion of domestic pension investments.
Nevertheless, positive changes have emerged in recent years.
New issuers are entering the market, including small and medium-sized enterprises. Around 25–30 non-financial companies currently have outstanding bonds, creating additional investment opportunities for pension funds.
Aslanyan said companies are also gradually beginning to view capital markets as a source of financing alongside traditional bank lending.
In his assessment, this process could improve the allocation of financial resources and contribute to economic growth.
Dram Appreciation Is a Risk That Can Be Managed
Around 34% of the funds’ investments are held in foreign-currency assets, meaning that appreciation of the Armenian dram can negatively affect returns.
To manage this risk, Amundi-ACBA uses hedging instruments, including foreign-exchange swaps.
According to Aslanyan, these mechanisms help reduce the impact of dram appreciation on overseas investments.
At the same time, stronger returns from other assets have more than offset the negative currency effect in recent years.
Armenia’s funded pension system is therefore gradually becoming not only a mechanism for financing future pensions but also an important source of capital for the economy.
The growing assets of pension funds are creating new opportunities both for Armenian companies and for large technology and infrastructure projects.