mast image

Special Report

Impact investing


Rate rise offsets returns

Rising bond yields were the bane of some Dutch pension schemes as the industry published its fourth-quarter and year-end results for 2010.

Despite positive and often double-digit growth for schemes in the Netherlands over a 12-month period, bond yield fluctuations between September and December resulted in losses of as much as 3.5% for the quarter.

Metal workers’ scheme PME lost 3.2% in the period, while still managing to return 12.4% overall on the strength of growth across all its asset classes, while the country’s largest private sector scheme PMT, with €37bn in assets, saw its equity portfolio grow by over 20%, allowing returns of 11.4%.

Juggernaut ABP, the second-largest European scheme next to Norway’s Pension Fund Global and servicing public employees across a number of sectors, meanwhile, reaped rewards from its exposure to emerging markets as its portfolio returned 26.6%, only outperformed by close to 30% growth from private equity investments. Overall, ABP now manages €237bn in funds, following a 13.5% year-on-year increase.

Dutch healthcare scheme PFZW avoided losses in the fourth quarter, and while its returns for the period went to 1.3%, overall returns remained over 12%. This means that the scheme now manages close to €100bn in assets.

Danish pension industry was confronted with rising longevity predictions eating into financial reserves.

Having put aside an additional DKK23bn (€3bn) in mid-December to counteract the effects of the country’s ageing population, ATP reported in its 2010 results that close to four-fifths of that additional funding disappeared.

Smaller player PKA increased its assets by more than 13% last year. Chief executive Peter Damgaard Jensen credited the scheme’s exposure to domestic stock for some of the performance. It posted returns of 38.4%, outperforming Danish equities. The domestic stock portfolio also outperformed its overall equity portfolio by close to 15 percentage points.

Meanwhile, Switzerland’s AHV returned 4.2%. The scheme said returns could have been stronger were it not for a 10% exposure to foreign currency, which it had not hedged completely.

The canton of Bern’s Bernische Pensionskasse announced an overhaul of its asset allocation after seeing only 1.2% returns, which was below even the average 2% increase reported by a Swisscanto survey of schemes in the country.

Finally, Sweden’s second buffer fund AP2 announced returns of 11%. Eva Halvarsson, the fund’s chief executive, highlighted that its policy of shifting back to active management was paying dividends, while its lack of exposure to volatile foreign currencies enabled growth.

Have your say

You must sign in to make a comment


Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2540

    Asset class: All/Large Cap Equities.
    Asset region: UK.
    Size: The fund will be added to our guided fund range.
    Closing date: 2019-05-27.

  • QN-2541

    Asset class: Small/Mid-Cap Equities.
    Asset region: Switzerland.
    Size: CHF 130m.
    Closing date: 2019-06-04.

  • QN-2542

    Asset class: All/Large Cap Equities.
    Asset region: Switzerland.
    Size: CHF 130m.
    Closing date: 2019-06-04.

Begin Your Search Here