Dutch pension funds lost an average 2.8% in 2001 according to figures from the WM Company that show equities as the year’s poorest performers, down an average 15%.
Real estate softened the blow for funds by providing positive returns of 12%. WM’s figures show direct real estate returned 14% while indirect real estate, or investing via funds, proved sensitive to equity markets and only produced returns of 4.5%.
Fixed income trailed real estate as the year’s best performer but still managed to return 6.5%. Salvation from fixed income and real estate means that 2001 was not the worst year for Dutch funds in the 11 years that WM has run the survey. In 1994, pension funds lost an average 3.3%.
But despite poor returns from equities, many funds have increased their overall exposure to the asset class. At the close of 2001, the 200 funds surveyed held an average 44% in equities, up three points from the previous year. Many funds have taken advantage of what they considered underpriced markets.
Nowhere was this more apparent than in the US. Of total equities held by the funds at the end of 2001, the proportion of European equities fell from 58% to 50% while US equities accounted for 27%, up seven points in a year.
In the 10 years to 2001, Dutch funds have enjoyed an average return from equities of 13.7%; over three years this figure is a more modest 4.6%.

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