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Return at Denmark's LD boosted by 11% climate fund performance

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An 11.6% return on its climate and environment investment fund gave a boost to the main balance pension product of Denmark’s Lønmodtagernes Dyrtidsfond (LD) last year, according to preliminary financial data published by the pension fund.

LD’s balanced unit-link investment option LD Vælger (LD Discretionary Investments) – which holds the assets of around 90% of LD’s members – made a return of 5.3% in 2016, it reported, which is the same as the previous year’s return.

The pension fund said LD Vælger had invested for the first time in its LD Environment & Climate fund in May last year, putting DKK750m into the fund and getting a return of more than DKK100m.

The climate fund made a 5.3% return in 2015.

The fund invests in quoted shares of companies that have a significant part of their business in environmental and climate-orientated products and services.

Both equities and bonds contributed positively to the 2016 LD Vælger result, the pension fund said.

The global equities fund also produced a high return in 2016, generating 9.4%, it said, up from 7% in 2015.

Danish shares, however, lost 2.8% over the year – down from the 37.5% return they generated in 2015.

The low-risk LD Short Bonds fund ended last year with a 1.8% return, and LD Mixed Bonds generated 3.9% for 2016 – a result LD described as very good seen in the light of the very low level of interest rates.

“There were periods of significant falls in share prices in 2016, and, despite this, the year finished with what is a very good result, seen overall,” LD said.

“Developments at a few large Danish companies were decisive for the Danish stock market.”

The global equities markets were more severely affected by uncertainty about growth in the world economy, as well as some key political events such as Brexit and the US election, LD said.

It added that the bond markets absorbed the first small step in the direction of higher interest rates.

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