Denmark’s LD Pensions (LD Fonde) has revealed its key pensions product has suffered an investment loss of nearly 10% so far this year, and said the degree of challenge hitting stock markets in the first half of 2022 has never been seen before – at least not for this long a period.

The pension fund manager said today that the balanced fund LD Discretionary (LD Vælger), which represents the bulk of its overall investment assets, had a year-to-date return of -9.3% as of today.

In the most recent 36-month period, the fund option had produced a return of 3.7%, it said.

Frederiksberg-based LD Pensions runs two funds – the older Cost-of-Living Allowance Fund (Lønmodtagernes Dyrtidsmidler) and the newer Holiday Allowance Fund (Lønmodtagernes Feriemidler).

LD Discretionary functions as a default option within the Cost-of-Living Allowance pension scheme, and had nearly DKK30bn (€4bn) in it at the end of 2021, compared to LD Pensions’ total investment assets of DKK51.46 at that point.

LD Pensions has overall assets of DKK95.29bn, including DKK42.76 in receivables from holiday funds – loans to employers as part of the Holiday Allowance Fund.

The firm said today that the return on Employees’ Holiday Funds was also negative for the early months of this year, with a return of -5.3%.

“The stock markets have been challenged in the first half of 2022 to a degree we have not seen before over the same length period,” it said in a commentary.

“Inflation has really taken hold, which can be felt in higher interest rates and declines across almost all traditional asset classes,” said LD Pensions.

The stock markets had expected rising inflation in 2022, it said, but added that the scale of what had transpired had nevertheless surprised many investors.

“There is continued growth and high employment in the economies, but a slowdown in activity is very likely in the coming months, which is also necessary to bring inflation down,” LD Pensions said.

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