NETHERLANDS - TNT, the pension fund for postal workers, saw its assets reduce by over €100m in the first quarter of this year, driven largely by negative returns in the equities market.

Data presented by the pension fund for Q1 2008 reveals its 39.1% equities holding generated a negative return of -13.5%, bringing its assets down from €4.5bn at the end of 2007 to €4.369bn by the end of March 2008, as investors sought safer ground for their investments on the back of concerns about economic growth worldwide and the worsening credit crisis.

TNT's investment strategy meant the fund's overall negative return was limited somewhat to a negative return of -3.8%, thanks to interest rate swaps, while currency hedging against the US dollar and sterling "added value because of the fall in the value of both currencies in relation to the euro".

There were also strong gains from a positive return of 9.5% on its 4.4% holding in commodities.

But this failed to prevent the overall drop in returns, so the scheme's cover ratio fell from 142% in 2007 to 130% by March.

Fixed income, which makes up 41.8% of the fund's asset allocation, returned 1.6% - boosted in particular by a 3.2% gain on inflation-linked debt - while property also fared well to deliver 2% in the first three months, thanks to strong gains for unlisted real estate in Europe and Asia.

TNT manages the pension fund assets for approximately 96,000 members, of which approximately 43,500 are active.