NETHERLANDS- Dutch pension funds lost an average 2.8% in 2001 according to figures from the WM Company. Figures published in the Dutch newspaper Het Financieele Dagblad show equities as the worst performing asset class, down an average 15%.
Real estate softened the blow for funds by providing positive returns of 12%. WM’s figures show direct real estate returned 14% while indirect real estate, or investing via funds, proved sensitive to equity markets and only produced returns of 4.5%.
Fixed income trailed real estate as the year’s best performer but still managed to return 6.5%. Salvation from fixed income and real estate means that 2001 was not the worst year for Dutch funds in the eleven years that WM has run the survey. In 1994, pension funds lost an average 3.3%.
But despite poor returns from equities, many funds have increased their overall exposure to the asset class. At the close of 2001, the 200 funds surveyed held an average 44% in equities, up three points from the previous year. Many funds are reported to have taken advantage of what they considered underpriced markets.
Nowhere was this more apparent than in the US. Of total equities held by the funds at the end of 2001, the proportion of European equities fell from 58% to 50% while US equities accounted for 27%, up seven points in a year.
In the ten years to 2001, Dutch funds have enjoyed an average return from equities of 13.7%; over three years this figure is a more modest 4.6%.
Dutch funds square up favourably against their UK counterparts according to figures released by Russell Mellon CAPs last week that showed UK funds lost 9.7% in 2001, the worst year since 1990 when they fell 10.2%.