NETHERLANDS - With a return of 8.4%, equities were the best performing asset class of the Dutch industry-wide pension fund for health care insurers, or SBZ, it said in its annual report.

However, a lower performance of large-cap equities - the bulk of the portfolio - meant that the yield stayed well below the benchmark of 10.7%. The €1.8bn scheme made returns of 7% and 6.2% on direct real estate and fixed income respectively.

As a result of a policy of sustainable investment, which has been adopted last year, 58% of the scheme’s assets have been invested within this category, it said.

SBZ excludes investments in companies involved in drugs and pornography, and those which turnover in weapons production is more than 50%. Also excluded are investments in the gambling, alcohol and tobacco industry.

“We assume that sustainable companies will operate as profitable as non-sustainable ones in the long term,” the scheme explained. It has decided to decrease its equity portfolio of 39.6% by 2%, and to increase its fixed income assets of 45.6% by the same percentage.

Based on the fixed accounting rate of 4%, SBZ’s coverage ratio was 122%, 3 points up since the end of 2003. Its 10-years average return is 8.3%.

The scheme has 35,700 members and 62 employer members.