NETHERLANDS - Dutch pension funds invest more in equities now than they did during the internet boom, according to a study by Dutch pensions regulator De Nederlandsche Bank (DNB).

At the end of September this year, Dutch pension funds invested 53% of their total €671bn assets in equities, compared to 51% in early 2000 before the dotcom crash.

"Data from the first three quarters of 2006 seem to indicate that both industry wide and corporate pension funds buy shares listed on the stock exchange particularly during a time of relatively bad returns - they form a stabilising factor in the equities market," the DNB said.

However, Dutch newspapers reported that experts fear the consequences of a new crash, arguing that pension schemes are vulnerable when stock markets decline.

Staf Depla, pension spokesman for Dutch Labour party, warns that pension funds need to be cautious when taking such risk. "We cannot afford it if premiums double again, as in the past five years," he told IPE today.

Though he does not think the rise in equity investments is a negative development, he argues that financial supervision remains important.

Elsewhere, it's emerged that only 30% of Dutch institutional investors comply with the Tabaksblat corporate governance code.

Rients Abma, executive director of the Eumedion governance foundation, commented that pension funds suffered from too many rules and regulations.

Also he said that 75% of the shares in firms registered with the Dutch stock exchange are in the hands of foreign investors, who are not bound by the Tabaksblat code.