BELGIUM - Belgian pension funds produced an average weighted return of 4.21% in the first six months of 2009, figures from the Belgian Association of Pension Institutions (BVPI) have revealed.

Findings from a survey of 50 pension funds with combined assets of €7.7bn, equivalent to 63% of the total market, showed almost half of scheme assets, 48%, were invested in bonds.

Belgian pension funds also allocated around 30% to equities, 8% to real estate and 7% each to cash and other investments, which consist primarily of investments in infrastructure.

This shows only a slight difference to the average investment strategy at the end of 2008, when pension funds achieved an annual return of -20.5% and finished the year with a 48% allocation to bonds and 30% in equities, while 10% was in cash, 3% in alternatives and the remainder in real estate. (See earlier IPE article: Belgian funds return -20.5% in 2008)

Latest figures also revealed smaller pension funds, those with less than €25m in assets, performed slightly below the average with a weighted first half return of 4.14%, while those schemes with assets of more than €25m achieved a weighted figure of 4.27%.

The BVPI highlighted the recovery plans of 82 pension funds had already been approved by the Banking, Finance and Insurance Commission (CBFA) at the end of July, with the rest expected to receive approval shortly.

Meanwhile findings from the survey showed pension funds have achieved a weighted investment return of 6.79% a year since 1985 - or 4.59% in real terms - although a number of schemes plan to further review their investment strategy. 

Philip Neyt, chairman of the BVPI, said: "Thanks to their good diversification and their long term and prudent investment policy, the Belgian pension funds have, as long term investors, strong long term results. They have always been looking for transparent investments and continue to do so."

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