Belgium funds chase equity trail
Belgian pension funds returned an impressive 17.2% average for 1998, slightly down on 1997’s figures of 18% - with 56 of the 125 funds surveyed for performance beating the average and the highest performer recording a staggering 51.4% rise on the back of extensive Belgian equity exposure.
The 1998 Belgian Pension Fund Association (ABFP/BVP) statistics, which in total cover 139 funds with a market value of BFr348bn (E8.62bn) for 193,341 members and 46,350 pensioners, also show medium sized funds with assets between BFr1-5bn making the performance running, with large funds (over BFr5bn) managing 17.2% for the year, and small funds (under BFr1bn) giving 17.1%.
The highest performing large fund came in fifteenth with returns of 23.2% and the stellar performer amongst the smaller schemes produced the second best figures in the survey, returning 37.4%.
And despite losing their appetite for domestic equities - with the survey showing average allocation down from 19.8% in 1997 to 18.1% last year, Belgium’s funds are certainly pursuing share opportunities elsewhere, recording an overseas equity jump of almost five percent from 27.5% to 31.2%. Belgian bond holdings suffered a similar fate dropping to an average 24.8% portfolio weighting from 29.2%, with foreign gilts rising to 14.8% from 12.1% in 1997.
Cash and property holdings showed little change on the year, standing at 5.8% and 5.3% against 6.2% and 5.2% respectively the previous year. Overall holdings of Belgian securities have dropped almost 11% on the year, with an average split of 52.4% in the domestic market and 47.6% overseas.
Commenting on the results, Richard van den Eede of the Belgian association says: “Despite predictions, 1998 has not been the year we had to learn to live with low interest rates or a stock market in depression.
“ What is clear is that regular good performance may have enabled established funds to stock up and face out future storms, but that recently created funds will have to learn to navigate their ships well.” Hugh Wheelan