Dutch pension funds invest structurally less in European companies than in US companies, DNB figures reveal. At the end of 2024, invested assets in European (EU) non-financial corporations amounted to €97 billion, compared to €293 billion in US counterparts. Looking at total investments, including government bonds and investments in financial institutions, Dutch pension funds invest more in Europe than in the United States.
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In total, Dutch pension funds had €1,568 billion in long-term investments under management, such as equities and bonds, at the end of last year. Of that amount, €97 billion (6%) was invested in non-financial corporations in the European Union, compared with €293 billion (just under 19%) in US non-financial corporations. Incidentally, this geographical distribution of investments is nothing new: Dutch pension funds have been investing more in US companies than European companies for some time.
At De Nederlandsche Bank, we independently compile statistics on the Dutch financial sector and economy. This article is based on these statistics. More information on our statistics and all dashboards can be found on our Statistics homepage.
Investment in the US consisted largely of equities (€254 billion) and less of bonds and loans (€39 billion). In Europe, the distribution was much closer: €63 billion in listed equities versus €34 billion in bonds.
The higher proportion of investments in US than European companies is partly due to the larger size of US companies: the combined market capitalisation in dollars is about $54,000 billion (including financial institutions), compared with $12,000 billion for European companies. Pension funds diversify their investments, which explains why they invest more in US companies.
Given this difference in market size, pension funds’ investments in European companies are actually comparatively high: where European companies combined are worth less than a quarter of their US counterparts, pension funds invest in them only a third of what they invest in US companies.
Larger absolute investments in US equities have paid off handsomely for pension funds: the return on these investments averaged 14% over the past five years, compared with 7% on European equities. This is partly due to well-performing US tech funds and the strong dollar. These healthy returns have further widened the gap between European and US equity investments.
Looking at total investments, Dutch pension funds invest more in Europe (€679 billion) than in the United States (€499 billion).
This is mainly due to investments in European sovereign bonds worth €294 billion, but also considerable investments in European financial institutions such as banks (€211 billion). Some of these investments are indirectly funnelled through to European companies, which are more likely than US companies to rely on banks for financing rather than the capital market.
The statistics in this news release are based on the ‘look-through methodology’, which involves including investments that pension funds indirectly hold through Dutch investment funds. In other words, we ‘look through’ these investment funds and also include the underlying assets and liabilities. This methodology differs from the standard macroeconomic approach, which only includes pension funds' direct investments.
Table 8.1.2.2BC: Pension funds assets and liabilities by geographical area
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