DENMARK - PFA, the DKK200bn (€26.8bn) pension fund, made a loss on investments in the first quarter, but said it had avoided far heavier losses thanks to its cautious investment strategy.

In the three-month period, PFA made a negative return on investments of 0.9%, the fund said.

"The first three months of the year were marked by a high degree of turbulence on the financial markets," PFA said in its Q1 results.

Both equities and corporate bonds fell significantly, and at the same time, both the dollar and sterling weakened a lot."

However, PFA had a cautious investment strategy over this period, as Henrik Franck, investment director, stressed: "Of course, it is not good to have a negative result, but when one looks at the general development on the markets, our return is satisfactory."

PFA had taken a series of steps in advance to minimise the risks, including a reduction in the proportion of equities it holds, protecting the fund from early on against further price falls.

"Because of this, we avoided losses of around DKK750m in the first quarter," said PFA officials.

The fund also hedged against falling bond yields and falling currency rates, and this insurance led to a combined profit of around DKK2bn in the three-month period, it said.
The fund also said it has a high proportion of equities investments in Danish shares, which did not fall nearly as much as foreign equities.

Franck said he expects the near-term to be characterised by turbulence on the markets, but that equities will rise later in the year.

PFA Pension is a mutual provider of corporate benefit plans - meaning it is customer-owned.

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