PensionDanmark has announced pre-tax returns of DKK9.1bn (€1.2bn), or 7.1%, on its investment portfolio for calendar 2013.
This compares with 10.2% for the year before.
But PensionDanmark’s total assets had grown to DKK152.1bn by the end of 2013, an increase of 9.4% over the year before.
Investments in global equities returned 20.4%, largely because of rising markets, but wind farms and real estate also boosted returns, returning 9.1% and 7%, respectively.
However, the rise in long-term yields over the year had an adverse effect on the portfolio of investment-grade government and mortgage bonds, which returned -1.3%.
Nevertheless, the fund said that, over the past five years, a typical member has received an accumulated return of more than 60% on their savings.
Torben Möger Pedersen, chief executive at PensionDanmark, said: “Our goal is to ensure our members get attractive and stable returns on investment year after year.
“For five years in a row, we have now delivered positive returns averaging approximately 10% p.a., and that’s very satisfactory.”
He added: “Equities gave the best return in 2013. Our investments in infrastructure and property form the stable base of our portfolio, where our aim is to achieve more stable and reliable returns than we can achieve in the more volatile equity markets.”
The fund said it planned to increase total assets in infrastructure and real estate from 15% to 20% of total assets over the next 1-2 years.
In recent years, it has significantly expanded its investments in infrastructure, with new investments in wind farms, a biomass-fuelled power plant in the UK and gas infrastructure in the Netherlands.
The real estate portfolio has also added new investments, including joint ownership of the Magasin department store building on Kongens Nytorv, and UN City, both in Copenhagen, the headquarters buildings for MT Højgaard and NCC in Greater Copenhagen, and housing in Aarhus, Vejle and Copenhagen.
Membership of the fund had increased by 9,000 to 642,000 at end-December 2013.
Total contributions remained static compared with last year, at DKK10.7bn.
The return before pension yield tax to a 40-year-old member was 9.3%, down from 10.9% the previous year.
For a 65-year-old member, the fall was sharper, from 9% in 2012 to 3.9% in 2013.