1/9/2010
By Kalpana Fitzpatrick
ATP, Denmark's largest pension fund, saw returns of 4.2% in the first half the year after four out of five of the risk classes in its investment portfolio netted the fund a profit of DKK 11.7bn (€1.57).
The Danish fund recorded total returns of DKK 15.2bn, with DKK 5bn of that resulting from equities alone, in the first six months of the year. Most of the equity portfolio consisted of listed domestic equities and private equities.
Other return generating risk classes included interest rates which accounted for DKK 8.5bn; credit which generated a return of DKK 1.8bn; and inflation which returned DKK 0.3bn.
Commodities were the only risk class to generate a negative return (DKK -0.4bn).
ATP’s CEO Lars Rohde said the fund was “especially pleased” with the large allocation to domestic equities and private equities, which performed well. International equities, however, saw negative returns, but Rohde said despite this, the fund’s returns had been surprisingly good.
The portfolio of listed domestic equities generated a return of 10.5% while the holding of private equities saw a return of 13.4%.
Morten Nilsson, head of international operations at ATP, told European Pensions: "Hedging our pension liabilities and having an agressively diversified investment portfolio improves the odds of having high and stable returns over the long term. That being said, a successful tactical implementation of our strategy has improved results further."
The fund’s bond portfolio also contributed significantly to the results as the yields on bonds, short-dated as well as long-dated, declined in the first half of the year.
The annual update of Danish life expectancy added an amount of DKK 0.9bn to provisions, equivalent to a life expectancy improvement of approximately one month.
