DENMARK - Domestic equities and interest rates helped Denmark's largest pension fund ATP - ranked fifth in IPE's Top 1,000 European Pension Funds - to a half-year profit of DKK11.7bn (€1.6bn).
The market return on the investment portfolio was DKK15.2bn or 4.2%, leaving ATP to manage DKK428bn at the end of June, including reserves of DKK76.7bn.
Four of the five risk classes of the Danish labour market supplementary pension scheme generated positive returns over the period.
Equities in general returned DKK5.1bn, equivalent to 11.1%, while interest rates posted a return of DKK8.5bn, equivalent to 5.6%.
The vast majority of ATP's equity portfolio consists of listed domestic and private equities, which returned 10.5% and 13.4%, respectively, making up for the 0% return in international equities.
Global bond investments contributed significantly to the results (5.7%), as the yields on short-dated and long-dated bonds declined in the first six months of the year.
Credit generated a return of 4.6% (DKK1.8bn), whereas inflation and commodities posted 0.3% (DKK0.3bn) and -2.5% (DKK-0.4bn), respectively.
The hedging portfolio - undertaken to protect ATP's liabilities - recorded a profit of DKK0.7bn, due mainly to the widening spread between domestic swap rates and long-dated domestic government bonds.
The annual update of Danish life expectancy added DKK0.9bn to provisions, which corresponds to a life expectancy improvement of around one month.
Pension benefits totalling DKK5.1bn were paid to members in the first six months, a rise of DKK576m compared with the same period in 2009 due to the increasing number of pensioners receiving a current ATP pension.
At the end of June, there were more than 777,000 ATP pensioners.
ATP's performance target for the whole of 2010 is DKK8.6bn.
The performance target for the 2006-10 has been set at DKK43.8bn, meaning ATP needs to generate a further DKK2.1bn in the second half of 2010 to achieve the five-year target.