Velliv has been shifting the geographical weighting of its equities portfolio towards Europe and away from the US since the end of last year, and expects to take that development further in the next few months, the Danish mutual pension provider has revealed.
Thor Schultz Christensen, deputy chief investment officer at the DKK270bn (€36.2bn) pensions firm, said: “At Velliv, we already initiated a shift in shareholdings at the end of 2024, when the result of the US presidential election was clear.
“We have sold DKK4bn (€536m) of US shares, and bought shares instead in many smaller European companies that are typically not dependent on exports to the US,” he said in a commentary published yesterday.
“This is a development that we expect to continue in the coming months,” said Schultz Christensen, who is in charge of investments pending the arrival of newly-appointed CIO Lea Vaisalo on 1 May.
The Ballerup-headquartered institution, Denmark’s fifth-largest pension fund, said that much had happened during the first months of this year, in particular new US president Donald Trump and his actions making daily headlines.
This had, inter alia, weakened confidence in the US economy, which had led many investors to choose European over US investments, Velliv said.
The value of European stocks had risen by 13.7% since the turn over the year, while US share prices had fallen by 3.5% in the same period, the firm said.
Trump’s capricious messages on tariffs on goods from, for example, the EU, China, Canada and Mexico, were making it difficult for US companies to plan investments, which was causing them to hold back, Velliv said. He added that this in turn weakened confidence in the US economy and created increased uncertainty about how the US Federal Reserve would set the leading interest rates.
“Our belief in growth in the US is falling because we can see that US companies and consumers are not going to spend as much money.
“More is being invested in Europe, and this means that growth expectations in Europe have become brighter,” Schultz Christensen noted.
Overall, he said Velliv currently expected a return on pension savings for customers with 15-20 years to retirement of around 4% to 6% for 2025.
With an expected slight fall in interest rates leading to capital gains for bondholders in the short term, he said Velliv expected a return on bonds of around 3% – slightly above the institution’s long-term expectations.
Equities, meanwhile, were seen as at the expensive end of the price scale, he continued, particularly those of large US firms.
However, with the market development so far this year having taken the top off some large company share prices, the deputy CIO said Velliv expected its 2025 equity return to be close to the long-term average of 7%, “although with a downward arrow”.
Velliv has been putting a new index-based investment strategy in place in recent months, with chief executive officer Kim Kehlet Johansen leading the revamp alongside Schultz Christensen since the departure of CIO Anders Stensbøl Christiansen in November.
As part of the strategy overhaul, Velliv made its entire active equities and alternatives teams redundant.
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