Dutch roundup: ING, Philips, TNO, SPW
The €25bn Pensioenfonds ING saw its financial position improve over the last quarter due in particular to the 3.7% return on its 71% fixed income holdings.
This more than offset the 5% loss on its return portfolio with its remaining assets, leading to a positive overall return of 1.1%.
Moreover, because the quarterly rate for inflation was lower than expected, the scheme’s funding in real terms increased by 1.5 percentage points to 93.2%.
Its official policy coverage – the average funding of the previous 12 months, and the criterion for indexation and rights cuts – remained at more than 140%.
The ING scheme said real estate returned 1.5% over the last quarter and 11.8% year to date.
In other news, the €17.3bn Philips Pensioenfonds reported a quarterly loss of 1.6%, taking its cumulative result for the year to 0.1%.
It attributed the performance to “significant losses” on equity, commodities and emerging market debt.
As a result of the loss and falling interest rates, its actual funding fell by 6.3 percentage points to 107.7%.
The policy coverage, which also fell as a consequence, stood at 112.6% as of the end of September.
Elsewhere, the €3bn Pensioenfonds TNO said it lost 1.1% during the third quarter but that the loss was limited by the 0.3% return on its combined hedge against interest and currency risk.
The scheme said quarterly returns varied widely, with local currency-denominated emerging market debt losing almost 10%, whereas US high-yield investments returned 7%, “due in part to the appreciation of the dollar relative to the euro”.
It said an 8.6% return on Japanese equity was in stark contrast with an almost equally large loss on equity from Hong Kong, Singapore, Australia and New Zealand.
The scheme’s performance over the first nine months was nearly 1.3%.
The Pensioenfonds TNO closed the quarter with a policy funding of 112.5%.
Lastly, SPW, the €10.5bn pension fund for Dutch housing corporations, reported a quarterly loss of 1.7%, which included a 1.4% return on its extensive interest hedge.
The sector scheme said it lost 17.5% on emerging market equities and 19.7% on commodities.
It also reported loss of 8.8% on developed market equities and 7.2% on emerging market debt.
Private equity, infrastructure and property were the best-performing assets classes, producing returns of 12.5%, 11.5% and 8.9%, respectively.
Hedge funds have generated 10.1% since January, according to the pension fund, which reported an overall return of 0.3% over the period.