High share profits for pension funds and insurance companies

09/09/2005 09:30

Pension funds and insurance companies in the Netherlands realised stock market profits of nearly 8 percent in the first half of 2005. These amounted to more than 53 billion euro. In addition they purchased nearly 25 billion euro of shares and bonds. According to figures from Statistics Netherlands, the proportion of securities in the total assets of pension funds and insurance companies rose form 78 to 81 percent.

Pension funds realise high profits on shares and bonds

In the first half of 2005, pension funds realised more than 11 percent profit on shares. Their overall share portfolio increased by nearly 34 billion euro in this period to more than 286 billion euro. Share profits accounted for most of this increase: 29 billion euro, of which nearly 20 billion euro was realised in the second quarter. This is a return of 7.5 percent. By comparison, the AEX all-share index rose by 4.8 percent in the second quarter and the MSCI world index for shares by 8 percent.

Pension funds realised a return of 6 percent on bonds. The bond portfolio rose by 27 billion euro in the first half of 2005, to over 232 billion euro. 13 billion euro of this increase consisted of profits, and 12 billion of new acquisitions. The proportion of securities (shares and bonds) in the balance sheet total of pension funds rose from 85 to nearly 88 percent.

Most profits for insurance companies on shares

The share portfolio of insurance companies rose by nearly 8 billion euro to nearly 103 billion euro. Most of this increase consists of share profits of nearly 7 billion euro, a return of nearly 7 percent.

The bond portfolio of insurance companies rose by nearly 13 billion euro to nearly 127 billion euro. Acquisitions accounted for 9 billion euro, while profits amounted to 4 billion euro.

The proportion of securities on the total balance sheet of insurance companies rose from just over 66 to nearly 69 percent. This increase was at the expense of home mortgages and private loans.

Pension funds own mainly foreign securities

Pension fund holdings of foreign securities rose by 56 billion euro in the first half of 2005, to 444 billion euro. At the end of the second quarter, foreign securities accounted for more than 75 percent of total pension fund assets; 30 billion euro of the increase in foreign securities were shares, of which 25 billion in non-euro countries. The other 26 billion euro were foreign bonds, of which 16 billion euro worth from outside the eurozone.

At the end of June 2005, the share of foreign securities in total assets of insurance companies was only 36 percent, at a value of 118 billion euro.

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