05/12/2011
By Ilonka Oudenampsen
With average returns of 4.8 per cent during the period 2000-2010, Dutch pension funds have beaten the benchmark of 4.6 per cent, research by Dutch regulator De Nederlandsche Bank found.
In the first decade of the 21st century, pension funds’ invested assets grew from €456.7bn to €732.8bn. The funds outperformed the benchmark by 0.21 per cent over that period, resulting in a total difference between actual returns and benchmark returns of €9.7bn over the entire pension industry
Returns were negative during the two crises in 2001-2002 and 2008, and DNB pointed out that the difference between the actual returns and the benchmark returns is only positive during the years the total investment result was positive. Pension funds therefore beat the benchmark in good years, but performed worse in bad years.
The regulator said the analysis cannot give a clear answer to the question of whether the outperformance is due to skilled investing (alpha) or if their investment policy has taken more risk than the benchmark (beta).
DNB also noted that the benchmark is chosen by the pension funds themselves, and that the regulator has very little insight into the exact composition of these benchmarks, as the funds are not obliged to indicate which benchmark they use. However, DNB said analysis has shown the chosen benchmarks are often generally a representative reflection of the investment policy.
The Dutch government had requested DNB carry out the research, for which the regulator analysed 168 pension funds.
Other stories you may find of interest:
March 2010 Products
A round-up by European Pensions
European mandates July 2009
The O2 Pension Plan has selected BlackRock as investment only defined contribution (DC) provider, to £30million in assets. The deal, for which O2 has selected BlackRock's DC Diversified Growth Fund as part of its default option, means the 3,000 members of the fund will be able to select BlackRock funds, including its DC UK Focus Fund
European mandates June 2009
Pension Insurance Corporation has appointed Schroders to manage an initial £100million segregated Global Corporate Bond Portfolio
