NETHERLANDS - Dutch pension funds purchased e10.6bn in foreign equity mostly from the US in 2004, while selling off e5.5bn in European equities.
According to the central bank (DNB), most of the purchased stock was from the US, with Luxembourg and Japanese equity in less demand. Some e5.5bn in equities from other European countries were sold off by pension funds over the year, in particular British stock.
Statistics showed funds purchased e6.8bn of the overall e10.6bn purchased in foreign equity during the final quarter of the year.
“During the fourth quarter of 2004, pension funds and insurance companies purchased over e9.5bn worth of foreign bonds,” the DNB said.
“To a large extent, these purchases served to substitute sold-off European equities – especially European bonds were purchased. Institutional investors clearly opted for US equities and for European bonds in late 2004.”
In addition, the DNB said a survey of the largest 25 pension funds in the Netherlands, with combined assets of 74% of the sector, revealed that the majority of company funds have adapted to the changed pension environment but industry-wide schemes have a way to go.
According to the DNB, most company funds kept contribution levels unchanged in 2005 and in some cases lowered them, while industry-wide schemes “need the year 2005 for adjustments and rehabilitation, as is evidenced by the increased contributions in 2005”.
While in 2004, a majority of funds did not fully index benefits according to wage or price developments, the DNB said half of the surveyed funds would not be doing so in 2005.
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