NETHERLANDS - SPW, the €4.5bn pension fund for the housing corporations, was able to limit its loss on investments to 2.7% during the fourth quarter, thanks to an extensive interest rate hedge.

Without the hedge - which is worth between 80% and 100% of assets through swaps - the scheme's returns would have been -12.1%, according to officials.

The cover ratio of the Stichting Pensioenfonds voor de Woningcorporaties dropped during 2008 from 145% to 96%, while the pension legislation requires a minimum funding ratio of 116%.

The worst performing asset class within the portfolio was alternatives, yielding -28.1% and falling more than 16% short of its benchmark. Commodities lost a massive 48.3% on investments within this allocation.

Private equity and hedge funds also showed a poor performance of - 24.2% and -13.8%, way off their benchmark of -1.3%, according to the industry-wide pension fund.

SPW's fixed income investments were its best performing asset class, yielding 0.4%, as government bonds performed especially well.

That said, corporate bonds also yielded negative returns as the general credit rating of companies fell, officials claimed.

The scheme served 515 affiliated companies and had 62,800 participants at the end of 2007, when it granted its 33,500 active participants total indexation of 6%. Deferred members and pensioners received indexation of 1.65%.

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