NETHERLANDS – Dutch pension schemes returned 8.4% on their investments last year - meaning they have now recovered most of the losses of the equity bear market, according to WM Performance Services.
“In the fourth quarter, the DPFI showed a return of 2.8%, leading to an annual return of 8.4% (excluding the impact of currency hedging),” WM said, referring to its Dutch Pension Fund Index.
“The fourth quarter return was boosted by decent positive equity market returns, although the declining dollar remains relatively weak and a source of discomfort to European exporters.”
WM, part of State Street, added that “on the whole, with two years of positive growth behind them, Dutch pension funds have recovered most of the losses they sustained during the savage equity bear market occurring between 2000 and 2002”.
“Last year’s returns look promising, but they should be viewed in the broader context of the Dutch pension fund landscape,” said Robert Rijlaarsdam, WM Performance Services’ local manager in the Netherlands.
“Changing regulations (FTK and IAS 19), the low-interest environment and improving longevity have had a big impact, and continued positive returns are needed to restore the funding positions of many pension schemes.”
WM’s index provides an indication of the expected return of the WM Dutch Pension Fund Universe. It is based on the returns of standard market indices and on the asset allocation of the Universe as of the end of last year.