In the first three months of this year, pension funds bought EUR 15 billion net of these securities. However, over the same period, they suffered capital losses of around EUR 4½ billion on their total portfolio of debt securities issued by euro area governments. Investments in government bonds – as in some other securities – are in part transacted through special Dutch mutual investment funds set up by the large pension asset managers.
Relative to a year previously, the portfolio of euro area government bonds has grown steadily, namely from EUR 131 billion at end-March 2010 (almost 20 percent of the prevailing value of total pension investments) – see chart. Pension funds mainly bought government bonds issued by euro area countries where economic growth recovered strongly after the crisis. In the past five quarters, pension funds have repeatedly invested in Dutch, German, French and, to a lesser extent, Austrian treasuries for a total of EUR 48 billion. The combined weight of Dutch, German, French and Austrian government debt securities now amounts to around 77 per cent of total pension investments in euro area government bonds.