Larger Dutch schemes return up to 1.9% in third quarter
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%.
KLM schemes strengthen funding levels
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.