NETHERLANDS - The industry-wide Pension Fund for Metalworking and Engineering, or PMT, has announced negative returns of 1.8% during the second quarter.
It attributed the results mainly to a drop in the value of equity, which returned -4.8%. European equity decreased almost 3%, whilst equity investments in the US and the Far East lost almost 7% and 8.4% respectively of their value, the €28.6bn scheme said.
With -1.8%, fixed interest still showed negative results, due to the rise of long-term interest rates. Private equity and alternative investments yielded 5.7% and 6.1% respectively. The returns of 0.7% of real estate was down from 6.5% in the first quarter, PMT added.
Because currency risks had been fully hedged, PMT didn't suffer from the sliding dollar, it stated.
According to the metal scheme, its asset mix showed a slight change from equity to fixed interest and real estate. "This has purely been caused by the strong decrease in the value of equity," it explained.
The present asset mix is equity 37%, fixed interest 39%, real estate 13% and alternative investments 11%.
The metal scheme, which stressed its figures are provisionally, reported an increase of its funding ratio 2% to 136%, "caused by the rise of market rates".
PMT is the largest market pension fund in the Netherlands. It serves over 31,000 companies and has over a million participants.
Elsewhere, the industry-wide pension fund for the building societies, SPW, has reported a second-quarter return of -3.4%.
The overall results have been negatively affected by interest swaps, which have been used to cover the liabilities since 2005, it said. The contribution of the interest rates swaps was -1.6%.
The scheme's returns, which have led to a decrease of its assets under management to €3.96bn, fell short of the benchmark of -1.6%, it added.
SPW's asset classes fixed interest, equity and real estate yielded -0.8%, -4.2% and 2.7% respectively.
Despite the negative returns, the pension fund's coverage ratio increased to 138%, due to the risen market rates, it indicated.
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