NETHERLANDS - PGGM, the Zeist-based pension fund for Dutch social and healthcare workers, has crept back into positive territory in the second quarter following successive dips in capital value.
The e48.4bn fund returned 8.0% in Q2, following a -1.9% drop in assets in Q1 and an overall slide of -6.9% in 2002. Funding levels also fell by 18% to 106% last year.
PGGM attributed the latest figures to the recovery on the equity markets: “The recovery in the financial markets, of which the first signs became visible in mid-March 2003, continued throughout the second quarter. Sentiment picked up strongly following the end of the war in Iraq.
“Although the fundamentals in both the European and American economies remain uncertain, the gains recorded in the equity markets were substantial and exceeded the negative return on equities in the first quarter of the year.”
The return for the first half of 2003 as a whole was 5.9%.With the exception of private equity (-0.4%), all the asset categories contributed to the positive return in Q2, with a particularly strong return of 15.0% on equities.
Fixed income yielded +2.5%, with commodities and real estate returning 3.5% and 2.1% respectively.
“Thanks to its foreign currency risks being hedged, PGGM was not affected by the sharp fall of the US dollar against the euro,” said the fund.
At the end of June, the fund’s investment portfolio stood at 46.6% equities; 30.6% fixed income; 13.5% real estate; 5.2% private equity and 4.1% in commodities.
Separately, PGGM is working on a recovery plan to strengthen PGGM’s buffers for the Dutch Pensions and Insurance Supervisory Authority (PVK). This will not be submitted in autumn.
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