PensionDanmark reported returns for last year of between 3.9% and 7.6% for scheme members with medium-risk investment profiles, and said its equities had outperformed the global index by three percentage points, largely by overweighting technology stocks.
Torben Möger Pedersen, chief executive officer of PensionDanmark, said: “We are pleased that despite a turbulent year in the financial markets, we can deliver a really good return to our members.”pensionda
The Copenhagen-based fund said its return on listed shares was 13.3% – about five percentage points higher than the return on the global equity indices.
“This is partly due to an increased exposure to technology stocks, which have performed relatively well during the coronavirus crisis,” the blue-collar pension fund said in the published statement on its investment returns.
The return on the medium-risk pool for 45-year-olds and up was 7.6%, and higher than the three-year average of 6.8%, while the return for the medium-risk pool for 67-year-olds and over was 3.9% – lower than the 4.4% three-year average return, PensionDanmark reported.
Among asset classes, the Danish labour-market pension fund said it had been equity investments in particular that had pulled returns higher last year.
However, Möger Pedersen said that despite 2020’s good result, PensionDanmark had to expect lower returns for several years to come.
“Therefore, we must maintain a focus on having the lowest costs in the industry, while ensuring the best possible returns,” he said.
AkademikerPension CEO celebrates returns rebound from March’s loss
Meanwhile, AkademikerPension, which covers mainly public sector employees including upper secondary-school teachers, reported a pre-tax annual return of 8.2% or DKK10.6bn (€1.42bn) for 2020.
Jens Munch Holst, AkademikerPension’s CEO, said it was “completely wild” that the pension fund had ended the year with a return of more than 8%, given that investments had been registering a loss of around 13% earlier on last year in the equity market crash linked to the COVID-19 outbreak.
“If we compare our returns with competitors with the same risk profile as ours, we are at the very top,” he said.
Munch Holst said critics may think that returns should be higher when looking at stock market price increases since the downturn in March.
“But as a responsible pension fund, we need to spread the risk and not just run the maximum risk for members’ money by investing all funds in stocks. So against that background, the return is very nice,” he said.