Featured statistic: + 1.3%

News
Date 28 December 2007

In the third quarter of 2007, the pension funds achieved an average return of 1.3% on their investments. At the end of that quarter, these investments totalled EUR 689 billion. Of this amount, 41% was invested in equities, 43% in fixed-yield securities (bonds), 11% in real estate and 5% in other investments.

Chart Quarterly return on pension assets in 2007

 

 

 

 

 

 

 

 

 

 

 

The third quarter of 2007 was dominated by the credit crunch, which has been causing much turmoil in the capital markets since the second half of July. Following a profitable first half of the year, return on the equity portfolio was slightly negative (-1.1%). Fixed-yield securities were affected by the rise in long-term rates during the first two quarters of the year, but benefited from falling rates in the third quarter (+1.3%). The category other investments recorded remarkably favourable results (+12.4%), thanks in part to investments in commodities, whose value soared as a result of the rising oil price.

With price gains and falls offsetting each other, the pension funds recorded stable profits in the first three quarters of 2007.

As a result of the changeover from final pay to average pay schemes, participants have become more dependent on the financial performance of their pension funds. As from 2007, DNB therefore publishes new tables, providing greater insight into the actual financial position of the pension sector and the indexation paid, which depends (in part) on that position (Tables 8.6 to 8.8 of DNB’s Statistical Bulletin).