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IPE special report May 2018

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WM says Dutch funds cut domestic equity holdings

NETHERLANDS – Dutch pension funds have cut their domestic equity holdings to 15%, from 40% in 1988, according to WM Co.

“Dutch funds are moving away from domestic equities and investing in European stocks,” said Robert Rijlaarsdam, head of the Dutch arm of performance measurement firm WM. “The loss to Dutch equities is about 8.5 billion euros over the last three years.” He said the decline coincides with the launch of the euro.

Rijlaarsdam also entered the debate about pension funding. “Of particular interest is the realised money-weighted returns of the pensions funds over the last 17 years which amounts to 7.7% annualised.”

“This means that if there is an overall funding issue, it has nothing to do with the long-term returns in the past.” He added: “This would imply that current funding concerns may not be as directly linked with equity investment as previously thought.”

“These are interesting times for the Dutch investment community, and I am looking forward to seeing how it reacts to the changes it will face next year,” Rijlaarsdam observed.

WM found that Dutch funds remain heavily weighted in the domestic and European sectors. “We see a strong tendency towards a global, sectoral investment approach,” said Rijlaarsdam.

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