NETHERLANDS - Dutch pension fund giant ABP has posted a return of 4.3% in the first quarter of 2004.
The fund returned 4.2% in the fourth quarter of 2003 and -2% in the first quarter of 2003.
The strong performance was primarily due to commodities and real estate which returned 12.9% and 11.1% respectively.
Capital value of the fund grew to e156bn at the end of Q1 2004 from e150bn at the end of 2003. The cover ratio improved by 3% to 112%.
ABP’s financial director Dick Sluimers said he was satisfied with the performance of the fund in the first quarter which was ahead of schedule specified in the recovery plan. However, he cautioned that the continued fall in interest rates was a worrying factor.
Sluimers said that it was still very hard to say when the fund could return to fully-indexed pensions.
The fund’s equities portfolio returned 5.7%, while private equity returned 2.7%. Fixed interest and others returned 3.7% and 5% respectively.
A statement outlined that though the investment climate was favourable, the risk-return relationship was still uncertain. Stimulation of economic goals and efforts within the corporate industry had led to good returns and an improved market sentiment in 2003. However, this improved sentiment has not translated to a rise in real interest rates, which in the long run is necessary for balanced economic development.
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