Two Dutch collective defined contribution (CDC) pension funds plan to decrease their allocations to index-tracking vehicles in order to avoid investing in companies excluded by their joint investment policy.

The CDC schemes of ING and Nationale Nederlanden said in their annual reports that the plan would affect their investments in developed market equities.

The ING CDC Pensioenfonds has €1.6bn of asset under management, while the NN CDC scheme has assets of €522m.

Part of the return-seeking portfolios of both pension funds, which also includes emerging market equities and property, has been invested through exchange-traded funds (ETFs).

As the managers of the ETFs were in control of the vehicles’ responsible investment policies, it was possible that they included allocations to firms that had been excluded from the pension funds’ investment universe, the schemes said.

The annual report of ING’s CDC said half of its return portfolio – 40% of the overall assets – was allocated to European and US equity.

ING and NN, which declined to provide further details, did not announce changes to their ETF investments in emerging market equities or property.

Their matching portfolios only consisted of investments in European countries and quasi-government institutions with at least an AA rating.

The pension funds also indicated that they wanted to diversify their strategic asset allocation.

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