NETHERLANDS - ABP, the largest Dutch pension fund which today revealed its assets had dropped by €44bn in 2008 to €173bn, has warned signs of a structural recovery on the equity markets are scarce.

The pension fund, which saw a steep drop in its real assets in 2008 through a negative return of 36.5%, said in its results presentation for the last quarter: "Despite the relatively attractive appreciation levels, the question remains whether equities will show a structural recovery in 2009."

Largely declining corporate results and the dominating insecurity will ensure volatility remains high for at least the first half of this year.

"Current market prices show that a long-term recession has been calculated in," claimed the fund.

The fund expects inflation to drop further, though it does not foresee a structural deflation.

ABP said it begun derisking its portfolio with slight changes to its investment mix in the last year, by increasing the fixed income portfolio from 40.4% to 44.8% at the expense of its real assets, such as equities.

PME, the €18.7bn pension fund for the metal and electro industry, also said it had determined its investment plan for 2009.

The fund had decided to stick to its equity ratio (around 20% of the entire assets) at the end of November and take it as a norm for 2009 - a drop from the 38% norm for 2008.

PME will also increase its fixed income investments to decrease investment risk.

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