NETHERLANDS - Commodities were the best returning asset class of the €4.5bn postal pension fund TNT last year, returning 30.5% in 12 months.
That said, annual figures of the €4.5bn industry-wide scheme reveal turmoil in the financial markets led to negative yields of -0.6% for the fund during the last quarter, resulting in an overall return of 2.4% during 2007.
Thanks to the higher interest rates on the capital markets, the market valuation of TNT's liabilities dropped, leading to a 6% rise of its cover ratio to 141%, the scheme said.
Impressive returns on commodities were mainly thanks to the rising oil price, although rising prices of agricultural commodities and precious metals also contributed, said Roelie van Wijk, cio of TKP - TNT's pensions provider.
An extra allocation to equity in emerging countries also contributed to the positive returns for TNT while hedging of the dollar risk to the euro proved to be an added value to the worldwide equity investments, the scheme reported.
All of TNT's asset classes showed positive results, with equity and fixed income returning 4.8% and 1.2% respectively.
The decision to raise its allocations in property to 11.1% and hedge funds to 3.1% resulted in yields of 6.2% and 1.7% respectively, the scheme also made clear.
Since 1 May last year, TNT has been investing in a fund with different hedge funds strategies, it said.
Based on an Asset Liability Management Study, TNT has recently decided to raise its allocation to inflation-linked bonds from 5% to 10%, to provide an extra buffer against inflation, Van Wijk also told IPE.
TNT has 96,000 participants, of whom 43,500 are workers.
If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com
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