The €23bn pension fund of banc-assurer ING has reported a 6.6% return on investments – including the combined effect of its interest and currency hedge – for the third quarter, resulting in a year-to-date return of 22%.
The pension fund’s 75% fixed income portfolio of bonds and interest swaps returned 7.9%, mainly due to currency fluctuations following increased interest spreads between the large economies, it said.
The Pensioenfonds ING added that its fixed income holdings returned 27.5% over the first nine months of the year.
The scheme said its equity portfolio (16.5%) returned 4.6% in the third quarter, adding that its European investments contributed no more than 1 percentage point of return.
Property – representing 4.8% of the pension fund’s assets – returned 7.2%, with listed real estate generating 9% and exceeding its benchmark by 0.5 percentage points.
The scheme’s combined private equity and hedge fund holdings returned 8.7%, leading to a year-to-date return of 15.3%.
Since the start of the year, the pension fund’s coverage ratio – discounted against market rates – has increased from 125.3% to 130%, equating to an official coverage ratio of 138.8%.
The pension fund said it preferred to use the market rate for its investment and risk policy, as this provided a “better picture of our financial position”.