NETHERLANDS - The €29bn pension fund for the building industry Bpf Bouw returned 1.2% during the second quarter.

However, 0.3 percentage points of the result were due to the combined effect of its hedge against inflation and currency risk, as well as interest risk, according to its annual report.

It attributed the slight drop of its coverage ratio to 110.6% to decreased long-term interest rates, the criterion for accounting liabilities.

Bpf Bouw said its fixed income investments and equity returned 1.1% and -1.2% respectively, while alternative investments and property returned -2.6% and 2.3%.

The scheme generated 2.5% on investments during the first six months. However, including the combined effect of its risk cover, the first-half result is no more than 0.6%, it said.

Elsewhere, the €5bn pension fund of telecommunications firm KPN reported a 0.9% return on its worldwide equity investments during the second quarter.

Briefing participants in its defined contribution scheme, it said European and emerging markets equities generated 0.4% and -1.8%, respectively.

The KPN scheme's sustainability fund for environmental and social investments incurred a 0.8% loss.

Triple A government bonds in the euro-zone returned 2.1%, according to the Stichting Pensioenfonds KPN, which added that European credit and index-linked euro bonds delivered 1.7% and 2.3%, respectively, during the second quarter.

The KPN scheme offers its participants the options of a life-cycle pension plan and free investment arrangements, allowing them to choose their individual investment mix of equity and fixed income.

A spokesman for the fund declined to provide details about the overall return and its current coverage ratio.

Following a funding of 104.3% at year-end, the scheme had to request an additional contribution of €41m from its sponsoring company.