Investment returns at Danish labour-market fund Industriens Pension fell to 6.7% last year from the 12.9% reached the year before, but the fund said its active strategy had enabled it to beat its benchmark.
Reporting 2013 figures, the pension fund for Denmark’s industrial workers said that, in absolute terms, its return on investment assets fell to DKK7bn (€939m) last year from DKK12.2bn in 2012.
Laila Mortensen, managing director of the pension fund, said: “In 2013, the active strategy produced a return that was 0.7 of a percentage point higher than our benchmark.
“This was mainly due to the fact the management of gilt-edged bonds and corporate bonds made a larger profit than the benchmarks we have in place.”
The fund said its investment assets were managed using an active strategy that aimed to achieve a return above the level of the general market.
This strategy involves higher costs than a passive approach aimed at generating no more than the market return, it said.
Danish equities produced a return of 38% in 2013, while foreign equities returned 20% in the year, Industriens Pension said.
However, returns on government and mortgage bonds returned just 0.1% as a result yield rises.
Industriens also said it reduced costs per member per month to DKK28 in 2014 from DKK30 last year.
It said it had been possible to bring down costs by having an IT platform that worked well and made it relatively easy to adjust pension plans, in addition to allowing service functions to be digitalised.
The number of scheme members rose by 5,000 during 2013 to stand at 405,000 at the end of the year.
Contributions were broadly unchanged at DKK7.8bn in 2013, while total assets under management rose by just over DKK5bn to DKK128bn, the fund reported.