NETHERLANDS – Dutch pension funds returned 14.8% in 2005, according to results from WM Performance Services’ Universe of Dutch Pension Funds.
“The average fund in the Universe achieved a return of 14.8% (including currency hedging), up from 9.9% in 2004,” State Street subsidiary WM said in a statement.
“Accounting for inflation, this represents a real return in 2005 of 12.9%.” WM said this was the third consecutive year of positive returns for Dutch pension funds and the highest overall return since 1999.
The universe comprises more than €224bn in assets but does not include the giant ABP and PGGM schemes.
“Despite high equity market returns, the asset mix did not change significantly compared to year-end 2004,” the company added.
“New investments were tilted to bonds, mostly driven by the imminent regulatory requirements as laid out in the nFTK,” a reference to the Dutch central bank’s new Financial Assessment Framework for pension funds.
Equities returned 31.2% for the average fund. Private equity, commodities and hedge funds yielded 32.6%, 28.7% and 14.1% respectively. This “underscored the success of alternative investment classes, as funds continued to adopt diversification strategies”.
Property returned 14%, with real estate funds returning 27.1%.
Fixed income investments “performed adequately”.