NETHERLANDS – The healthcare scheme PFZW has closed the fourth quarter with a 2.5% return, leading to a year-to-date result of 13.4% and assets rising to €130bn.

At the presentation of its preliminary figures for 2012, it said its 2% 'structured credits' portfolio – consisting of collateralised debt obligations to banks – returned 30.4%.

Jan-Willem van Oostveen, the scheme's manager for investments and financial policy, attributed the result to falling interest rates and credit risk.

"Moreover, there is demand for structured credits, albeit on a limited scale," he added.

Listed equity and private equity returned 15.6% and 9.8%, respectively, last year, whereas property and high-yield/emerging market debt generated 14.7% and 13.6%.

High yield/emerging market debt as well as corporate bonds – returning 12.2% – benefited from falling interest rates and narrowing credit spreads during the year, the pension fund said.

The healthcare scheme also posted a 19.6% return on government bonds and interest and inflation swaps.

It lost 1.5%, however, on its 3% hedge fund portfolio, due to a combination of "underperformance by some external managers and the heavy weighting of defensive strategies".

Peter Borgdorff, the scheme's director, said PFZW would re-evaluate its hedge fund strategy this year due to increasing supervision and disappointing performance in recent years.

He added that the scheme would also pay extra attention to its 2% infrastructure portfolio, which delivered 2.6% in 2012.

PFZW attributed the 0.8% loss on its 7% commodities holdings in part to a "limited decrease" of oil prices.

It said its yearly returns since 1971 had been 8.3% on average.

During the last quarter, PFZW's funding rose by 2 percentage points to 101%, which projects the mapped out recovery at 105% at the end of this year, according to Borgdorff.

However, he acknowledged that a rights cut might still be necessary if returns and long-term interest rates decrease during 2013.

PFZW has been unable to grant inflation compensation in recent years, and its indexation is now in arrears of 10%, Borgdorff said.

The pension fund provides pensions to 2.5m participants in the care and welfare sector.

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