Dutch pension funds sell off securities
17 March 2009
Written by Sophie Baker
EUR 26bn worth of securities were sold by Dutch pension
funds in the fourth quarter of 2008, according to figures published by
De Nederlandsche Bank.
The funds carried out equities sales totalling almost €9bn, and disposed
of €17bn worth of debt certificates such as bonds. Due to these sales,
and to substantial price losses on the funds’ equity holdings, the
value of their equity and debt portfolios fell by €86bn during this
final quarter of 2008 to €529bn at year-end. In 2007, this was 19
per cent higher.
However, investment transactions of pension funds turned around in the
fourth quarter, with sizeable securities sales taking place. Two-thirds
of the equity sales concerned shares of US companies and financial institutions.
European debt certificates also affected sales. In contrast, the first
three quarters saw purchases worth €37bn.
De Nederlandsche Bank said that the asset sales took place during a particularly
hectic time for the financial markets, and pension funds’ investment
policies were driving these sales. With a view to spreading risk and realising
long-term returns on investments, the Bank said pension funds therefore
aim for a strategic mix of equities and bonds in their securities portfolios.
The price losses on the stock exchanges reduced the relative size of their
equity holdings, and in order to restore this balance bonds were sold
off. This also reduced the increased relative weight of debt assets.
