ATP returns exceed 8% this year
DENMARK – ATP, the Danish labour market supplementary pension scheme, has reported returns of 8.4% for the first nine months of 2003.
In the third quarter, returns on the fund were only 0.8%, but the strong performance of the first two quarters has ensured a year-to-date return of 8.4%.
The lower returns in the third quarter were attributed to a reversal in the market upturn of surging equity prices and rising bond yields in September. Equities, which account for around 15% of the entire portfolio returned 10.4% over the quarter, while the portfolios of bonds and interest-rate hedging instruments produced a negative return of 1%. Bond allocation is targeted at 77%.
The portfolio of other assets such as private equity and real estate, which account for around 8%, produced returns of 1%. Real estate produced a positive return of 1.4%, while private equity generated a loss of 0.5%.
Combined, the portfolios outperformed the fund’s benchmark by 0.6%.
For the final year results, ATP is predicting a market return on investment of 9.7%, 2% of which may be attributed to interest-rate hedging. This is based on the assumptions that interest rates will remain unchanged since the end of the third quarter, and that the normal return on equities is 2% above the yield on a 10-year government bond.
ATP now has 254,215 million danish kroner (34.2 billion euros) in assets.