Investment fund returns are less volatile than equity returns.
Dutch investment funds achieved returns of 18% in 2019, the highest level since the financial crisis. According to the AEX index, equity investments listed on the Dutch stock exchange achieved higher returns of 24%. A savings deposit would have yielded an average return of 0.7% in 2019.
In addition to investments in equity, investment funds’ portfolios also include other types of investments, such as bonds and real estate. Over the longer term the returns of bonds and real estate are slightly lower compared to those of equity, but they are also less volatile, as can be seen in Figure 1. In 2009 and 2019 for example, the AEX index showed higher results than the investment funds combined. In 2011 and 2018 on the other hand, when share prices dropped, the losses for investment funds were smaller.