NETHERLANDS - The €10.3bn railways scheme SPF has concluded the third quarter with a relatively comfortable cover ratio of 160%, despite a funding drop of 18% and negative returns of -4.4%.

That said, the scheme reported its financial position has been affected by the volatility of interest rates after 30 September, albeit a spokesman of the scheme's provider, SPF Beheer, declined to be specific about the present funding ratio when questioned.

According to the scheme's Q3 results update, SPF's equity investments delivered a negative return of -12% after currency hedging as the scheme's hedging this time added to negative contributions, yielding a loss of -2.6%.

Fixed income, property and alternatives returned 1.5%, 1.4% and -5.2%, according to the Stichting Spoorweg Pensioenfonds.

SPF has lowered its equity exposure from 45% to 37% since the beginning of the year and increased its fixed income allocation by 3% to 41%.

At the same time, the scheme has also raised its allocations to real estate and alternatives by 3% to 14% and by 2% to 8% respectively.

SPF's assets have dropped by €1.3bn since the start of the year, officials noted but the scheme is still said to have returned 6.3% on average over five years.

Elsewhere, SPOV, the €2.1bn public transport scheme, saw its funding ratio decrease by 10% to 132% at the end of September, "caused by a decreasing asset value and falling interest rates".

SPOV, which is also managed by SPF Beheer, reported negative returns of -3% during the third quarter.

Equity was its second-worst performing asset class and delivered a negative return of -11.8%, after currency hedging, but alternatives fared worse with a negative yield of -11.9%.

In contrast, fixed income and property returned 1.8% and 1.5% respectively.

Officials say SPOV has reduced its equity allocation by 8% to 30% since the end of 2007 and has increased its fixed income investments from 55% to 57%.

The Stichting Pensioenfonds Openbaar Vervoer, has also increased its property allocation by 3% to 10% and has allocated 3% of its assets to alternatives in the same period.