PensionDanmark said it is making ongoing adjustments to its overall portfolio after selling off Russian assets, and reported negative returns for its pension savers of up to 5% so far this year.
Releasing its 2021 annual report this morning, the Danish labour-market pension fund revealed its investment returns for the first two months of this year had been negative to the tune of between 2.5% and 4.7% depending on the age of the individual saver.
But since that this followed 2021’s returns of 10.3% to 16.0%, the provider said scheme members’ savings had still made overall gains since the start of last year.
The Danish pension fund said it sold off its Russian government bonds and equities in Russian state-controlled businesses before the country’s invasion of Ukraine.
It said: “The investment department is following the situation closely and continuously adjusting PensionDanmark’s portfolio in line with the changes in the risk picture.”
The firm said that after “record high” returns on their savings in 2021, its members’ pensions were well-equipped for 2022, which had started with turbulent financial markets and a tense geopolitical situation.
Torben Möger Pedersen, chief executive officer of PensionDanmark, said: “The young members have many years until retirement and plenty of time to catch up in the stock markets.”
He added that its older members had a lower risk profile, and that the fund’s mechanism for spreading out returns over a long period gave it good chances of avoiding having to reduce pensions, “even if the turmoil in the markets should continue for a longer period of time.”
Regarding the impact of the current Russia/Ukraine crisis on investment, Claus Stampe, chief investment officer at PensionDanmark, told IPE on Monday: “Our main concern right now is the uncertainty as to how long and how deep this will be.”
Sanctions were being imposed and upcoming counter sanctions from Russia were also likely, he said, adding that Russia was the third-largest oil producer in the world and covered around 40% of the gas demand in Europe.
“With the aggressive actions taken by Russia we have no desire to support the Russian regime,” Stampe said, referring to the pension fund’s divestments.
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