PME, the €39bn pension fund for the Dutch metal industry, has said it will double its stake in residential mortgages to €2bn through an investment in Munt Hypotheken of the Dutch Mortgage Funding Company (DMFCO).
Marcel Andringa, executive board member for asset management at PME, said the scheme had “killed two birds” with the investment.
“We invest in the Dutch economy through an established player, and we also achieve attractive and stable returns against a limited risk,” he said.
He said it was also important to PME that Munt Hypotheken issued mortgages against an “attractive” rate, making it easier for people to get onto the property ladder.
Jeroen van Hessen, partner at the DMFCO, said mortgage investments currently returned between 2.5% and 3%.
He said this had declined by approximately 1 percentage point compared with January, however, due to the drop in interest rates.
PME is the seventh pension fund to invest in residential mortgages through the DMFCO.
Last month, the €60bn metal scheme PMT doubled its commitment to Munt Hypotheken to €2bn.
At the same time, PGB, the €19bn pension fund for the printing industry, doubled its commitment to €1bn.
Dutch pension funds are looking increasingly to residential mortgages as an alternative for low-yielding government bonds.
Due to growing demand for residential mortgage investments, the DMFCO has more than tripled its initial target of €3bn to €10bn.
At the moment, Dutch pension funds have committed €5bn in total to Munt Hypotheken.