NETHERLANDS - Dutch pension funds invested over €21bn in securities again in the first quarter of this year, though the bulk of that money headed for bonds and the purchase of equities did not offset losses, figures from the pensions regulator have revealed.
Latest data presented by De Nederlandsche Bank (DNB) suggests pension funds were willing to buy back into investments as part of a move to adjust their investment risk profile and compensate for the negative yields suffered in earlier months, yet the investments they took up failed to halt further turmoil and losses eroded a further €15bn from their solvency levels, according to the regulator.
Local pension funds bought €16.5bn worth of bonds in the first three months of this year - a significant shift from the €10bn in fixed income securities sold in the last three months of 2008 - and 21% of which was funnelled into long-term government bonds.
A further €7.2bn was spent in net purchases of German, French Italian, Spanish and US government bonds, according to DNB, in the hope this would facilitate secure, regular returns for pensions funds, matched to a lower default risk.
In reality, the continuing turbulence of the equity markets to the end of March instead lowered returns further as the share of equities held by pension funds declined, despite spending €4.5bn on listed stocks, and net purchases were not enough to offset price losses.