Larger Dutch schemes return up to 1.9% in third quarter

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Several larger Dutch pension funds reported returns of up to 1.9% during the third quarter, leading to year-to-date results of up to 5.2%.

As a consequence of rising interest rates and positive returns on investments, coverage ratios of the schemes also improved by several percentage points.

The €24.9bn PGB posted a quarterly result of 1.9%, taking its cumulative return to 4% for 2017 so far.

The multi-sector scheme attributed the quarterly profit of 0.8% on its 43.5% matching portfolio to its dynamic investment policy. Both government and corporate bond allocations yielded 0.9%, while mortgages returned 1.7%.

The scheme said its return portfolio generated 2.8% during the last quarter. It was largely able to compensate the drop of the US dollar relative to the euro using its currency hedge. As a result, equity holdings gained 2.8% since June and 7.5% year-to-date.

PGB reported that property, infrastructure and private equity had delivered 1.1%, 0.7% and 2.9%, respectively, over the third quarter, and yielded 4%, 2.4% and 6.6% so far this year.

It said its funding rose 2.9 percentage points to 103.7%.

Vervoer, the €23.9bn pension fund for private road transport, reported quarterly and year-to-date results of 1.1% and 1%, respectively. However, it did not specify its returns per asset class.

The scheme’s funding improved by 1.7 percentage points to 103.5%.

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The €3bn Pensioenfonds KLM Cabinepersoneel announced a quarterly profit of 1.6% and a cumulative return of 5.2%.

It said its holdings in fixed income, equity and real estate had generated 0.8%, 3.2% and 0.2%, respectively, since June. Funding of KLM’s pension fund for cabin staff rose 2.9 percentage points to 110.9%.

Coverage of the Algemeen Pensioenfonds KLM (€8.5bn) improved 3.7 percentage points to 112.7% at September-end, following a 1.6% investment return during the last quarter.

KLM’s pension fund for ground staff said that risk-bearing bonds in its portfolio had benefited from the “continued positive sentiment among investors as well as increasing corporate profits”.

The €8.6bn Pensioenfonds Vliegend Personeel KLM said it returned 1.2% over the third quarter and 4.4% year-to-date.

Funding of the pilots scheme improved by 4 percentage points to 124.5%, exceeding its required financial buffers by 1.3 percentage point.

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