Denmark’s Industriens Pension has reported a 5.1% return for 2020, with listed equities contributing to the total with a 14.3% gain, but unlisted assets failing to perform as well due to the effects of the COVID-19 pandemic.
The pension fund for industrial sector workers said in a preliminary statement on last year’s financial results that equities had recovered “faster than feared” during 2020, after falling sharply in March.
The rebound was due to help from central banks, government aid packages and the prospect of vaccines, it said.
Laila Mortensen, Industriens Pension’s chief executive officer, said: “We made very good returns from both Danish and foreign equities, while several of the unlisted asset classes have had a more difficult year as a result of the coronavirus pandemic.”
The DKK199bn (€26.8bn) pension fund — which has a relatively high allocation to unlisted assets at almost 30% of its portfolio — said the pandemic resulted in “a tough year” for infrastructure and foreign real estate, but added that unlisted equities finished the year with positive results after gains at the end of 2020.
Commenting on the strong performance of listed equities, Industriens Pension reported that Danish and US shares experienced sharp rises in 2020, while the European stock markets had not recovered as strongly from the market turbulence earlier in the year.
The labour-market pension fund said its average annual return across all age groups over the last ten years was 7.3%, with its average annual return in the 28-year period since its inception in 1993 at 8.7%.
“The coronavirus crisis has not changed our expectations of continued reasonable returns in the long run, albeit at a lower level than we have been accustomed to for the past ten years,” said Mortensen.
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