Denmark’s pension fund for academics posted an overall investment loss of 1.9% for 2018 – but it still ranked at the more successful end of the pensions market.
The DKK115bn (€15.4bn) MP Pension reported the loss in an early results release for the year just ended.
Anders Schelde, CIO of MP Pension, said: “A negative result is never satisfactory, but you have to remember that it comes after nine years of very high returns.”
In 2018, he added, there simply were not many places investors could hide in order to avoid losses.
“In my judgement, MP got away lightly when I look at the returns of other pension companies,” he said.
Trade war, Brexit, rising interest rates in the US, fears that growth was tailing off and geopolitical tensions all helped pull the equities markets into negative territory last year, MP Pension said.
Industriens warns of weak 2018
Meanwhile, blue-collar labour-market pension fund Industriens Pension said it had also been hit by falling share prices last year, but gave no specific figures for 2018 investment returns.
Karsten Kjellerup Kjeldsen, the DKK165bn pension fund’s CIO, said: “Even though our big investments in types of asset other than listed shares helped us, unfortunately we can’t avoid being hit when equities fall as sharply as in 2018.”
Equities markets fell significantly last year in Denmark, Europe and the US, as well as most emerging markets, he said.
Industriens Pension said it would publish its overall 2018 return later this month.
Growth slower but outlook positive for 2019, says Sampension
Sampension reported losses for younger scheme members in 2018, but slim gains for those close to retirement with low or moderate risk profiles.
The DKK290bn fund also said it had delivered some of the market’s best returns for last year, despite the losses for some investors.
In its market-rate pension scheme, members with 20 years to retirement suffered losses of 2% in its low-risk fund. Moderate and high-risk members experienced declines of 3.3% and 4.9% respectively.
Members with no years left until retirement made returns of 0.4% in the low risk section and 0.2% in the moderate risk section. High-risk investors’ pots declined by 0.8%.
Henrik Olejasz Larsen, Sampension’s CIO, said: “Shares fell by more than 20% on the big markets last year, and in the next few years, we will have to get used to somewhat lower returns than the record high figures we have been seeing for a few years.”
That said, the broader picture of the world economy continued to look good for 2019, even though growth would be slower, according to Olejasz Larsen.