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Belgian pension funds return 9.6 % - Mercer

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BELGIUM - Powered by equities and, to a lesser extent, real estate, Belgian pension funds returned 9.6% in 2003, according to Mercer Human Resource Consulting.

"The results from Mercer Human Resource Consulting's annual pension investment performance survey indicate that the average Belgian pension fund produced a positive return of 9.6% over 2003," Mercer said. "This positive result is mainly due to the rather conservative attitude of Belgian pension fund managers."

The result was “largely attributable to investments in equities (+14.8%) and to a lesser extent, in property (+17,4%)” Mercer said. The report said that Belgian pension funds maintained around 50% of their allocation in equities.

“This attitude has been punished in 2001 and 2002 with negative returns of respectively -4.9% and -16.1%,” the report said. “Fortunately, thanks to the recovery of equity markets in the last nine months of the 2003 calendar year, positive returns of close to 10% are shown.”

The survey covers 105 of the around 150 active Belgian pension funds. There are about 250 funds in total. Mercer
Analyses 139 portfolios, which represents around 5.1 billion euros in assets under management.

Mercer said that the median fund has achieved an average annual return of 5.33% over the past decade. Taking into account 1993, which yielded an exceptional 23.9% return, the annual average over 11 years amounts to 6.9%, the consultant said.

Equities’ allocation has risen to 51.2%, from 48.1% at the start of 2003. Bond allocation has fallen to 41% from 44.7%.

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