Belgian pension funds have posted solid1999 investment returns of 15% – well over the 9.9% average of the preceding 14 years. The figures have dropped though against 1998 returns of 17.2%, despite the highest performing fund scoring 39.5%.
The rise and shift in equity allocation was particularly marked in 1999 with the figures showing a reduction from 18.1% to 10.2% in domestic shares and a clear jump from 31.2% in foreign equity for 1998 to 42.8% last year.
Average equity proportions have now cleared the halfway hurdle in Belgian funds to reach 53%.
Richard Vanden Eede, administrator of the Belgian Association of Pension Funds, comments: “The good returns over these last few years confirm that the investment flexibility now permitted in Belgium is generating a plus value which pension funds are profiting from.
He adds: “Over a period of five years the figures are remarkable. It would, however, be hazardous to project them forward in the long term. These results are the conjunction of elements which cannot be reproduced eternally; lowering of bond rates, internet, e-commerce.”
Pointing to the dip against the1998 score, he noted: “Let’s ensure therefore that diversification remains a key issue.” Belgian schemes have now returned 16.7% over three years and 15.1% over five years with inflation included and 15.3% and 13.4% respectively with inflation removed.
And the survey shows that e100 placed in a Belgian pension fifteen years ago would now be worth e432.
In terms of the categories of Belgian schemes, mid-size funds with between one and Bfr5bn in assets were the best performers returning 16.1%.
The largest Belgian plans with over five billion in assets gave 14.9% for the year and the country’s smaller plans posted 12.7%.
Asset allocation for the year shows bonds now representing 33% of the average portfolio - split 14.7% Belgium/Luxembourg, 18.3% non domestic paper. Real estate makes up 4.4% and cash and other instruments 9.6%.