Strong growth in security holdings of pension funds and insurance companies

10/03/2006 09:30

The combined security holdings of pension funds and insurance companies rose by nearly 20 percent in 2005. This is the largest growth in the last six years. Share profits accounted for nearly three-quarters of the increase. According to figures from Statistics Netherlands, the total value of shares and bonds amounted to 799 billion euro in 2005.

Pension funds realise over 26 percent profit on shares

Share and bond holdings of pension funds rose by more than 100 billion euro to 558 billion euro. The increase was mainly realised by profits amounting to 79 billion euro on security holdings. Share profits amounted to 66 billion euro, a return rate of 26 percent. By comparison the AEX all-share index of domestic shares rose by just over 25 percent in 2005, the MSCI world share index by nearly 24 percent. Pension funds sold 5 billion euro worth of shares and bought 30 billion euro worth of bonds net.

Growth for insurance companies from profits and acquisitions

Security holdings of insurance companies rose by 32 billion euro to 241 billion euro in 2005. This increase was just about divided equally between profits from existing holdings and acquisitions of new securities. Profits amounted to 16 billion euro, 14 billion of which was accounted for by profits on shares. This is the equivalent of a return of 14 percent. Insurance companies bought 4 billion worth of shares and 11 billion euro worth of bonds.

Growth in securities raises balance sheet total

The strong growth in security holdings pushed up the balance sheet totals of pension funds and insurance companies by nearly 15 percent in 2005. The growth was distributed evenly through the year. The combined balance sheet total of pension funds and insurance companies was 980 billion euro. The balance sheet total for pension funds roe by 96 billion euro to 635 billion euro, that of insurance companies rose by 29 billion euro to 345 billion euro.