The indicative average coverage ratio of Dutch pension funds rose from 116 per cent to 122 per cent in May, returning to a level higher than before the "trade war," Aon's pension thermometer has revealed.

In addition, the indicative policy coverage ratio, based on the average coverage ratio of the past twelve months, remained stable at 118 per cent.

Throughout May, the risk-free interest rate increased by an average of thirteen basis points over the first 40 years.

The ultimate forward rate (UFR), which pension funds use to calculate the value of their future liabilities, was 2.2 per cent.

As a result, the value of liabilities decreased by approximately 3.1 per cent, while assets increased by approximately 2.9 per cent.

Developed market equities rose by 5.9 per cent, and emerging markets grew by 4.4 per cent, leading to higher capital market interest rates, which caused the total fixed-income portfolio to fall by -1.6 per cent.

However, credits (0.5 per cent), high yield (1.5 per cent) and emerging market debt (0.5 per cent) benefited from the positive sentiment with a positive return.

The total return of the portfolio was 2.9 per cent.

Aon explained that the mood of financial markets improved during May, which was caused by several trade agreements between the US and other countries.

Indeed, the US central bank (Fed) kept interest rates stable again, the Bank of England cut interest rates by 0.25 per cent to 4.25 per cent, and the European Central Bank (ECB) is expected to cut interest rates by 0.25 per cent in early June, Aon noted.

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