Danish pension funds produced almost 8% in returns on average in the first half of this year, according to an independent analysis, with labour-market scheme Pædagogernes Pension (PBU) leading the ranking, followed by the pensions arm of the bank Nordea.
PBU produced an 11.1% return for its members between January and the end of June, while Nordea Pension generated a return of 10.3% for its main product, according to the analysis from independent pensions adviser Nikolaj Holdt Mikkelsen.
The ranking compared returns for medium-risk profiles for customers in the middle of their working lives with life-cycle, market-rate products.
Holdt Mikkelsen said in a post on LinkedIn that Danish pension returns had been strong in the first half of this year. The average return for the 19 products compared, from 11 different providers, was 7.9% in his published league table.
“An overweight of liquid shares, in particular the largest American ones, and in part corporate bonds in the bond market, have been the shortcut to a solid return in the first half of the year,” he commented.
Third in Holdt Mikkelsen’s league table for H1 returns is Nordea’s climate product, Nordea Pension FP Grøn Omstilling, with a 10.2% return, followed by PFA’s climate pension product with a 9.4% return.
AkademikerPension came fifth in the independent ranking with a 9.3% return – a half-yearly gain with which the pension fund’s chief investment officer Anders Schelde said his institution was very satisfied.
“Because, with inflation that is still high, war and major geopolitical unrest, and with an American presidential election in sight, it was by no means a given that the stockmarket would behave in this way,” said the CIO of the DKK145bn (€19.4bn) pension fund for academic degree holders, in a statement earlier this month.
The Danish pharmaceuticals firm Novo Nordisk had pulled the domestic market higher in the first half, Schelde said.
“We’ve experienced a nice development in stable shares, with Novo Nordisk in the lead, but also great returns from certain cyclically-sensitive shares, whose prices have been favoured by a stronger-than-expected economy,” he added.
Looking towards full-year returns, however, Schelde said the war in Ukraine, the situation in Gaza and many other geopolitical tensions made it extremely difficult to predict anything.
“And in addition to the US presidential election, we are still looking at a high degree of uncertainty on both the bond and equity markets,” he continued.
Meanwhile, Danica Pension, whose market-rate product Danica Mix returned 8.1% according to the particular profile compared in Holdt Mikkelsen’s ranking, said in its interim report on Friday that returns had mainly been driven by equity markets. The pension fund added that its portfolio had benefited “from an appropriate exposure to the key sectors”.
In the longer term, the Danske Bank subsidiary said, returns had also benefited from a broad exposure to alternative investments.
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