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Dutch investment funds in 2019 achieve highest returns since the financial crisis

Statistical news release

Published: 21 February 2020

In 2019 investment funds achieved returns of 18%, the highest level in 11 years. This was slightly below the increase of the AEX index (24%). The difference can be explained from the fact that investment funds also invest in bonds and real estate in addition to equity. The average returns ranged between less than 4% for hedge funds and over 27% for equity funds.

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.

Substantial spread in returns

The type of investment fund played a significant role in 2019. Returns varied strongly, although all types of funds except one achieved returns of more than 10% in 2019. Equity funds achieved the best results, with returns of over 27%. Despite the lagging profit growth of listed companies in Europe and the United States, equity investments achieved high returns across the world, partly as a result of falling interest rates. In 2018, on the other hand, equity funds took losses of -6%.

Since interest rates in the euro area continued to decline until the end of August, bond funds also managed to achieve profitable returns in 2019. In the fourth quarter they had to give up some of this growth, but for 2019 as a whole they achieved returns of almost 11%.

With 3.8%, hedge funds were the only type of funds that achieved returns below 10%. This type of fund generally does not confine itself to a single category of investment (e.g. equity, bonds or real estate), but seeks to achieve positive returns by leveraged funding or by pursuing a strategy that is not tied to general market indices.

From EUR 1.00 to EUR 2.37 in 11 years

The value of an investment of EUR 1.00 as at end-2008, spread over all Dutch investment funds, increased to EUR 2.37 by end-2019. If this amount had been invested exclusively in equity funds, its value would have increased to EUR 3.60. An investment in another type of fund would have resulted in a final value below the average of EUR 2.37. Figure 2 shows the value as at end-2019 of EUR 1.00 invested in various types of investment funds.

More information

See our Statistics website for more information about investment fund returns.

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