NETHERLANDS - The Dutch Pension Fund Index (DPFI) showed a Q4 2005 return of 2.3%, and an annual return of 14.7%, excluding the impact of currency hedging.
This is the third consecutive year in which Dutch pension funds have achieved above-average returns said investment measurement firm WM Performance Services in its forecast of results of the DPFI for 2005.
The forecast indicates the expected return of the WM universe of Dutch pension funds, and is based on the returns of standard market indices and on the asset allocation of the WM universe at the end of last year.
WM said positive performance in Q4 was largely driven by the further rise of equity markets. It found that equities in aggregate gained 28.9% on the year. Japan with 44.8%, the Far East excluding Japan with 32.3%, and emerging markets with 55%, were the strongest performers.
The index also found that investments by Dutch funds in European and American equities was much higher, and that these markets offered considerable returns in 2005 as well.
Despite rising interest rates, the index reported a “reasonable” return on fixed income investments of 5.5%. International bonds, at 8.5%, were found to have contributed to this return largely on the back of the appreciation of the US dollar. Real estate was also shown to have produced a “stable” return of 11.2%, which WM said was partially thanks to property funds, which showed a return of 27.1% in 2005.
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