NETHERLANDS - Equities were the best performing asset class for pension funds during the second quarter, returning an average 6.85%, pensions supervisor De Nederlandsche Bank has announced.
In the three months between equities turbulence of March and the recent global credit crunch, listed stocks were the best performing asset class as fixed income and property yielded negative returns of -1.97% and -1.56%, while alternatives returned just 0.88%, the regulator stated in its latest statistical bulletin.
Dutch schemes have this year set aside an average of 2.15% for indexation on their active participants. Industry-wide pension funds allocated a fraction more at 2.2% while company schemes and occupational plans indexed 1.64% and 1.87% respectively.
According to DNB, the total amount of money invested in listed securities by pension funds and insurers rose to €632bn and €233bn respectively during the second quarter.
This led to a rise in the value of equities by €10bn to €400bn, which is 54% of their balance sheets. However, a drop in the performance of the bonds market at that time meant the value of bonds remained unchanged, DNB said.
That said, pension funds acquired €6bn of long bonds, which is - according to DNB - a considerable amount compared to previous quarters.
Three-quarters of these purchases were US corporate bonds, increasing the schemes' total position of US long bonds to €53bn or 22% of their investments in long bonds, the regulator added.
According to DNB, investment in private equity has also risen by €11bn during the past 18 months, taking the total of investments in this sector to €40bn.
At the end of 2006, the assets of Dutch pension funds amounted to €746bn, of which €688bn had been invested, DNB said.
Less than 15% of pension funds offer a final salary plan now, as 54% have switched to average salary schemes.
Pension schemes have over 5.9 million active participants in total while the combined numbers of deferred members and pensioners are 8.5 million and 2.5 million respectively.