MP Pension returned negative 1.9% in 2018
Written by Sunniva Kolostyak
Danish pension scheme MP Pension struggled in the past year, returning -1.9 per cent over the year due to the unrest across the global market.
The market has caused negative returns for all pension providers in Denmark as it fell over 13 per cent against the Danish krone over the year, but diversified portfolio of both equities, bonds and alternative investments has ensured that MP Pension did not see the same losses as others, according to CIO Anders Schelde.
He said that even if negative returns are never satisfying, it is important to remember that the past nine years have been dominated by very high returns.
“In 2018 there simply weren’t a lot of places to hide as an investor to avoid losses. It is my assessment that MP was let off easy when I look at the yield from other pension providers,” Schelde said.
Key factors such as trade wars, Brexit, rising rates in the US, fear of a recession and geopolitical unrest contributed to the negative market.
According to Schelde, 2019 looks somewhat better, saying the “global growth motor is spinning slower – but spinning nonetheless”. But the big yields that pension savers have become accustomed to are the past.
“In the short term it is therefore still looking prudent for earnings and results, so our best estimate right now is that returns will be positive in 2019, albeit modest. If we look further, at the next 5 to 10 years, the trend from 2018-2019 seems to continue,” he said.
“Unfortunately, global investors must get used to the fact that the high returns in the wake of the financial crisis will not continue.”