Denmark’s Pædagogernes Pension (PBU) has announced it produced returns of 4% and 9% for its oldest and youngest scheme members, respectively, in 2020, citing investment in high-quality firms as the reason for the “strong” results.
The returns reported by the DKK79bn (€10.6bn) pension fund for early-childhood teachers are down from the 9% to 20% range accomplished the year before, but the fund’s CIO described the latest results as strong, saying not all stock markets had ended last year in positive territory.
Carsten Warren Petersen, CIO at PBU, said: “The fact that Pædagogernes Pension’s return nevertheless ended the year so strongly is mainly due to the fact that we mainly invest in companies of high quality and with stable growth prospects.”
He gave the example of “a number of large US technology firms,” which he said had experienced significant increases in their share prices in the course of 2020.
PBU said the prospect of COVID-19 vaccines being available had a positive effect on the global markets towards the end of the year, with the expectation of normalisation in 2021 buoying markets for the rest of 2020.
“However, far from all stock markets ended the year with a plus,” Warren Petersen said.
PBU said in its commentary that positive news about upcoming vaccines had also raised a number of questions, such as how quickly populations would be vaccinated, how effective the vaccines would prove to be, and what would happen in developing countries.
On prospects for this year, PBU also said the dramatic events in the US, with the new president soon taking office, and the battle for the next election already beginning, could have implications for the country’s relationship with China, which has previously hit global markets.