NETHERLANDS - The 44.5 billion euro Dutch healthcare and social service fund PGGM has reported returns of –1.9% for the first quarter of 2003.

The negative investment return is attributed to lower equity prices. PGGM’s equity investments returned –6.9%. Fixed income returned +2.1%, real estate returned +1.9%, and private equity returned +2.1%. Returns for commodity investments were volatile, with a positive return of 24.8% in the first two months of the year, and a negative return of 14.9% in March. This was a result of fluctuations in oil and oil product prices.

With the addition of the first-quarter’s results, the five-year return for PGGM has now fallen to +2.3% from +5.1% last quarter.

Last year the fund returned –7.3%, but over a long term period (since 1970), the fund has returned +8.6%. The average return of the total portfolio over the past 10 years is +8.7%.

As of the end of March 2003, PGGM was holding 45.6% of its assets in equities, 29.5% in fixed income, 3.9% in commodities, 15.3% in real estate and 5.7% in private equity.

In its quarterly report PGGM also announced that, in spite of underfunding of 2%, the certainty of PGGM being able to pay the nominal pensions rights enforceable by law is “close to 100%”. “This means that if PGGM were to be liquidated now, it would be able to pay all the nominal rights accrued. It would also be able to index nominal pension payments so that around 75% of the rises in wages and salaries would be able to be passed on,” says the report.

PGGM says it is currently considering what an acceptable price for certainty and the fund’s pension and indexation ambitions would be.