LD lost €42m in the first half of 2018

Danish Lønmodtagernes Dyrtidsfond (LD) has lost DKK 311m (€42m) so far in 2018, blaming a defensive investment strategy.

The pension scheme’s credit investments returned -1.6 per cent, while its shares returned around zero, both under the respective benchmark index.
Alternative investments yielded 1.7 per cent but was still lower than return requirements, the fund said in a statement.

Gold-guaranteed bonds gave a 0.6 per cent return, which was above the benchmark.

The lack of investment in growth shares was a major cause behind why LD did not meet the equity benchmark, the fund said in a statement.

“LD’s defensive equity strategy meant that LD was significantly underexposed to growth assets which provided relatively high returns during the period.

“This, amongst other, include global players like Facebook, Amazon, Apple, Netflix and Google, all of which have had major price increases over a long period of time, but have also showed great fluctuations over short periods,” LD wrote.

While LD said the result was “definitely not satisfactory” for the majority of its members, the fund is still rated as one of the top 10 per cent funds in Europe, according to Morningstar.

A strong US economy and good growth prospects in the rest of the world would normally result in a financial market growth, but political withdrawals in relation to customs and trade from the American president has resulted in uncertainty, the fund explained.

“Relatively speaking, the return is therefore considered to be very satisfactory,” LD said.

    Share Story:

Recent Stories


Podcast: The benefits of private equity in pension fund portfolios
The outbreak of the Covid-19 pandemic, in which stock markets have seen increased volatility, combined with global low interest rates has led to alternative asset classes rising in popularity. Private equity is one of the top runners in this category, and for good reason.

In this podcast, Munich Private Equity Partners Managing Director, Christopher Bär, chats to European Pensions Editor, Natalie Tuck, about the benefits private equity investments can bring to pension fund portfolios and the best approach to take.

Podcast - The power of three: Using Common Contractual Funds to improve tax outcomes for investors
Large asset owners are still investing in equities in a way where they are taxed on their income. The implication is that they get a poorer return. They need to, and can, improve this, but how?

In this podcast, AMX Head of Client and Manager Development, Aaron Overy, and AMX Product Tax Specialist, Kevin Duggan, discuss with European Pensions Editor, Natalie Tuck, about three options to help ensure good withholding tax outcomes for institutional investors.

Mitigating risk
BNP Paribas Asset Management’s head of pension solutions, Julien Halfon, discusses equity hedging with Laura Blows

Advertisement