NETHERLANDS - Dutch pension fund returns halved in 2006, with average returns down to 7.4% from the 14.8% recorded in 2005.
According to investment performance measurement business, WM Performance Services (WM), the European performance measurement division of State Street Corporation, the 2006 return figure represents a real return of 5.9% after the Consumer Price Index (CBS) has been factored in. This still comes in above the ten-year annualised real 'Dutch Universe' return of 5.2%.
WM looked at 65 Dutch pension funds, excluding ABP and PGGM, with joint invested assets of approximately €138bn as at the end of 2006.
Real estate was the strongest performer in 2006, with returns of 17%. Fixed income, the largest investment category with 44% of invested capital, achieved a result of -0.9%. This return was especially influenced by the negative contribution of Euro bonds.
Equities performed reasonably well (12.3%), with emerging markets (21.5%) and Europe (20.6%) being the strongest contributors to equity performance.
Currency hedging was a strong factor in the returns, adding a positive impact of 1.6% to the overall return, due in large part to the fall of the US dollar by 10.5% versus the Euro over the course of the year.
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