NETHERLANDS - The €3.6bn Dutch pension fund of paints giant Akzo Nobel returned -20.6% on its investments in 2008, as its equity allocation plummeted in value by 42%.
Fixed income was the best performing assets class for the fund in 2008 and produced positive returns of 5% for the whole year but delivered 3.1% in particular during the fourth quarter.
Officials reported the Stichting Pensioenfonds Akzo Nobel incurred its largest losses on both equity and commodities during the last quarter of last year, as the two asset classes returned -21.9% and -33.1% respectively.
Property investments suffered badly too as they delivered negative yields of 21% and 13.6% over the whole year and the fourth quarter respectively, according to the scheme.
The pension fund's hedge of both currency and interest rate risks helped to prevent further losses as the strategy generated 0.3%.
The scheme hedged its investments against the US dollar, the Japanese yen and the British pound in 2008, though a spokesman for the scheme declined to provide details on the extent of its interest rate hedge.
The Akzo Nobel fund reduced its equity allocation from 43% to 36.8% in 2008 and boosted its fixed income investment allocation from 42.7% to 49.7%.
At year-end, its property and commodities allocation were 11.2% and 4.3% respectively.
The cover ratio of the Stichting Pensioenfonds Akzo Nobel was approximately 95% at the end of 2008, which was down from 144% a year earlier, when its assets totalled €5bn.
The scheme recently decided to refrain from paying indexation to its 49,500 participants though it has kept its contributions at the same level under long-term agreements, the spokesman said.
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