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PGGM obtains boost from oil surge

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PGGM, the second largest Dutch pension fund, made an 18.8% return on commodities in the third quarter of 2004 – but equities were down 0.7%.
“PGGM achieved an overall return of 1.7% in the third quarter of 2004,” the Zeist-based health care scheme said. “The highest return was 18.8% on commodities, which was largely attributable to the rise in oil prices.”
The commodities portfolio has returned 36.2% in the year so far. Fixed income returned 2.5% in the third quarter. The fund is now worth E57bn.
“The overall return of -0.7% on equities had a negative effect on the overall return for the quarter.” The fund has made a return for the year-to-date of 5.9%.
“Sentiment in the financial markets is currently uncertain,” said chief investment officer Roderick Munsters.
“The net effect of rising oil prices, higher short-term interest rates in the US and uncertainty about the sustainability of the economic recovery have all contributed to the horizontal trends we’re now seeing in the markets.”
“PGGM’s good spread of investments over the various asset categories has ensured a relatively stable return for 2004. We expect a further modest improvement in the portfolio return in the fourth quarter of the year, which should ring the overall return closer to the forecast long-term return of around 8%.”
Meanwhile, in the first nine months of the year, civil service scheme Stichting Pensioenfonds ABP made a return of 6.5%. At the end of September, the fund was worth E160bn – a growth of E10bn. Its coverage ratio has gone up from 109% to 113%.
“Institutional investors are walking through the low return environment with moderately positive expectation for the mid- to long-term,” said fund chief investment officer Jean Frijns.
The pension fund for metal industry employees, PME, has reported a 6.8% growth in the third quarter. In the first quarter the fund made a 3.2% return.
Its coverage ratio is up to 111%, two percentage points more than the end of 2003.
Meanwhile, the Dutch Public Transport pension fund (SPOV) has reported a yield on investments of 0.9% in the period.
The overall yield of investments in the first nine months of 2004 has been set at 3.8%, with a total invested capital of e1.9bn . The coverage ratio is 132% – flat in comparison to the second quarter.
And Spoorwegpensioenfonds, the Railway Pension Fund, has also presented its figures – with an overall yield on investments of 0.5%.
Bonds yielded 1.8%, real estate 3%, with the impact of currency coverage set at 0.8%. The total yield on investments in the first nine months was 4.3%. SPF is now worth e9.6bn – from e9.4bn at the end of 2003.

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