NETHERLANDS - The Dutch Pension Fund Index for the third quarter showed returns of 3.8%, including currency hedging, WM Performance Services announced.
The index, or NPFI, showed positive returns in all important asset classes. The effect of current hedging was merely 0.2%, WM said. The NPFI returns over the first nine months are 4.3%.
"Due to proper business results and the positive interest climate, equity yielded 5.9% on average, WM stated. "Only equity from Japan lagged behind and returned only 0.2% during the third quarter."
According to WM, fixed interest returned 2.6% on average. "International bonds were less susceptible to currency changes compared to the first half. They showed a quarterly yield of 2.1%."
"The fixed interest markets recovered worldwide, partly due to better inflation forecasts, because of decreasing oil prices. The less restrictive monetary policy of central banks, and the improved interest climate, had a particularly positive effect on long-term bonds," WM explained.
Real estate rose by 5% during the third quarter, when it profited from improvements in the bond and equity markets," WM stated. It reported quarterly returns of 13.7%, and returns of 30.2% during the first nine months, at real estate funds.
The average returns over the first nine months for equity and real estate is 5.9% and 12.5% respectively, WM said.
The NPFI is an indication of the expected returns of the WM Universum of Dutch pension schemes. It is based on the returns of standard market indices and on the Universum portfolio at the end of 2005.
WM Performance Services is part of State Street.