The significant home bias in Danish pension fund portfolios decreased last year, but remains far larger than warranted by the comparative size of the country’s economy and stock market, according to a new industry association analysis
Insurance & Pension Denmark (IPD) published figures today showing total investments in Denmark by the country’s pensions sector dipped to DKK1.902trn (€254bn) in 2025, down 3% from the year before, but at 38% of portfolios on average, still far outweighed allocations to the EU outside Denmark and to the US – geographical weightings which stood at 21% and 27%, respectively.
IPD said the 38% home bias should be seen in light of the fact that Denmark’s GDP constituted around 0.4% of the world’s total GDP.
“This means that the pension industry has invested around 100 times more in Denmark than the size of the Danish economy actually suggests,” the lobby group said.
Tom Vile Jensen, deputy director at the lobby group, said: “Denmark is still the country in which most pension savings funds are invested.”
“Even though we are struggling to get a better framework for investing in new growth companies in Denmark and Europe, this has not stopped pension companies from increasing their European investments in the past year,” he added.
Ranking third as an investment area for Danish pension funds, IPD said investments in the EU – excluding Denmark – had grown steadily throughout 2025, rising 13% over the year, while the value of the pension funds’ US assets had grown by 6%.
Investments in remaining countries, such as India, China, Brazil, Japan, Norway, Switzerland, Canada, grew by 12%, according to the IPD data.
Vile Jensen said that while much had been written about investors looking to the US – because the return has been higher than in Europe for a long time – in 2025 European investments, excluding Danish, had grown the most in pension fund portfolio terms, the figures showed.
While US investments increased overall in Danish pension fund portfolios in 2025, the IPD figures also reveal portfolios of US bonds decreased in value by around DKK39bn, with about half of that change attributable to US government bonds.
Seen on its own, the providers’ exposure to US government bonds shrank by 40% during the year, IPD stated.
“The reduction should be seen in light of the high US government debt level, which increases uncertainty about investments in US debt,” the association said.
Some Danish pension funds said earlier this year that they had sold out of US government bonds on negative views of the fundamentals.
