NETHERLANDS - The €4.8bn pension fund of housing corporation SPW saw its cover ratio rise by 6.5 percentage points to 103.4% in the third quarter of this year, thanks to an 8% return on investments.
Equity was the best performing asset class and delivered a return of 12.2%, the scheme reported, as investments in emerging markets and the Far East, in particular, contributed to the result.
SPW's fixed income portfolio also performed well by delivering a 5.8% return, beating its benchmark by 2.1 percentage points, officials said.
The industry-wide pension fund attributed its fixed income results mainly to the performance of corporate bonds, "following the increased risk appetite of investors".
In contrast, SPW's figures revealed property holdings were almost 5 percentage points short of the scheme's benchmark as investments fell in value by 0.5%.
The scheme's investments in commodities and private equity also generated negative returns of -6.6% and -2% respectively, whereas hedge funds delivered 0.2%.
According to officials, SPW's third-quarter results included a 1.1% contribution from an extensive interest rate hedge on its liabilities, generated through interest rate swaps.
That said, its hedge against equity risk caused a loss of 0.6 percentage points, on the back of rising equity markets.
Officials said SPW raised its underweight equity allocation during the third quarter by purchasing European and US equities. The pension fund also increased its already overweight exposure to fixed income through investments in corporate and governance bonds.
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