NETHERLANDS - PGGM, the Zeist-based pension fund for Dutch social and healthcare workers, has posted a return of 3.4% in the first quarter of 2004, as compared to returns of 5.9% in the fourth quarter of 2003.
The e54.9bn fund said that all asset categories, particularly equities which returned 3.8% and commodities which returned 10.3% made a positive contribution.
PGGM’s CIO Roderick Munsters, said: “The first quarter saw a hesitant economic recovery in Europe and a moderate level of consumer and business confidence. In addition the financial markets were adversely affected by the terrorist attacks.
“Helped by low money- market interest rates around the world and the tentative growth in corporate profits, all investment categories generated a positive return. The best-performing portfolio was commodities again, with a return of 10.3%, largely reflecting the sustained rise in energy prices in response to the continuing geopolitical tensions, strong demand in Asia and relatively low stock levels in the United States.”
The five-year average return has declined from 4.9% to 4.7% after the Q1 2004 returns replaced returns for the first quarter of 1999, which were at 4.3%.
For Q1 2004, fixed income returned 2.5%, with real estate and private equity returning 2.1% and 0.5% respectively.
A fund statement said that the theme of PGGM’s 2003 annual report and the quarterly report is solidarity.
“The instruments which PGGM can deploy in order to safeguard this solidarity are contribution policy, investment policy and pension policy. Of these, freedom of investment policy in particular is being threatened by political pressure and PGGM, like other pension funds, is striving to preserve it.”
Munsters added that restricting this freedom would mean lower returns and compensate for this loss of revenue, pension contributions in the Netherlands might have to increase with approximately e2bn.
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