Pensioenfonds Vervoer, the €37bn pension fund for the Dutch transport sector, has increased its allocation to US equities after previously running an underweight position versus its benchmark.
The decision to align US equity exposure with the weight of US equities in commonly used indices such as the MSCI World Index was taken in 2024, according to the fund’s annual report.
“In view of the economic dynamics and developments in the US, it was decided at the time to gradually reduce the underweight,” said fund director Willem Brugman.
The move puts Vervoer at odds with a growing number of peers that have either begun reducing US exposure or are considering doing so.
In spring 2025, as Donald Trump’s US presidency was taking shape, the fund’s board “again discussed geopolitics extensively”. However, this did not alter its approach.
“Market capitalisation-based indices are a good representation of the investable universe. They follow trends and always have the winners in their midst who largely determine the return,” Brugman said.
By end-2025, Pensioenfonds Vervoer had 11.1% of its total portfolio invested in US equities, up from 9.5% a year earlier. The increase came mainly at the expense of Asian equities. Last year, the fund appointed an additional external US equity manager to implement the shift.
“In doing so, an explicit attempt was made not to increase the impact of the dominance of the Magnificent Seven stocks (large tech stocks such as Microsoft, Apple, Nvidia and Alphabet) too much,” Brugman noted.
Underperformance
Although Vervoer seeks to limit exposure to the Magnificent Seven, underweights to these stocks among external managers have been a key factor behind the fund’s 2025 underperformance, Brugman indicated.
Pensioenfonds Vervoer is one of a small number of pension funds that maintain largely active exposure to US equities.
As a result, its equity portfolio underperformed its benchmark by 1.4 percentage points last year. The fund noted this was not an isolated case, with underperformance persisting over a longer period.
An investigation is now underway into the underlying drivers, according to the fund’s latest annual report.
High-yield overhaul
The pension scheme has already begun adjusting its investment strategy. An active Japanese equity manager was replaced last year by index provider State Street.
The high-yield bond allocation has also been overhauled, with Vervoer shifting from regional to global mandates. Maintaining separate US and European mandates had limited added value, according to Brugman.
“Considerations have been that there are more opportunities in a global mandate, lower costs, and that a more future-proof portfolio is created in view of a possible increase in sustainability-related restrictions,” he added.
Of the five high-yield bond managers previously used by the fund, only one remains, albeit with a revised mandate. Two new managers have also been appointed.
