DNB releases report that shows pain suffered by Dutch funds in 2008; reveals that investment returns down in Q3 2011

The Dutch Central Bank (DNB) yesterday released a report on its investigation into the investments made by pension schemes over a period of ten years (2000 – 2010), which reveals the extent of losses they suffered in 2008.

In the report, DNB establishes that the schemes' collective assets fell by €219bn in 2008, of this, it says, €107bn was down to an increase of the liabilities due to a lower interest rate and €112 had too be written off  due to a lower value of the assets. This latter was down to a high exposure to risk, says DNB.

In order to investigate the investment practices as thoroughly as possible the researchers opted to look at a sample group of 168 pension schemes which, on average over the course of ten years, represented 83% of the total investments made by schemes in the Netherlands.

The bank has also said that a further €20bn loss is the result of the implementation of the bank's investment calculation strategy, which compares the actual investment results with the benchmark (Z-score).

This follows on from statistics released on 21 November, which shows that Dutch investment funds have suffered serious recent losses.

In the third quarter of 2011 Dutch investment funds' net assets declined by 0.3% compared to the previous quarter to €466.8bn. The banks says that is the first decrease in net assets since the second quarter of 2010, and does not present an encouraging picture as uncertainty over the Eurozone's fate continues.

Investment funds reported a negative total return of 4.9% in the third quarter of 2011 - the biggest recorded loss on investment portfolios since statistics began in the fourth quarter of 2008. Equities were the main culprit.

A statement from the bank read: "Equity markets came under downward pressure in the third quarter of 2011 on the back of weak global economic growth and the European debt crisis. A capital loss of 13.6% (Quarter-on-Quarter) was suffered on equities in the third quarter of 2011".

azeevalkink@wilmington.co.uk