• Partagez
•  Delicious
•  Digg
•  Facebook
•  LinkedIn
•  Reddit
•  Twitter

Question : Mercer Feedback

			Envoyer par email				Imprimer

Belgium
Brussels, 20 March 2008

Belgian pension funds delivered median returns of  +0.7% in 2007, according to the 21th edition of Mercer’s annual Pension Investment Performance Survey.

Mercer’s research is based on an analysis of 96 active funds, which represent two-thirds of the 150 active funds in Belgium. The study analyses 127 investment portfolios with total assets of 6.8 billion Euro.

Willy Santermans, senior actuary and Partner at Mercer, commented "The investment results of the pension funds have suffered enormously because of the downward trend of the financial markets as a result of the credit-crisis. The median fund of the study achieved in 2007 a very poor result equal to 0.7%.  After the very positive period of 2003-2006 with decent investment results the Belgian pension funds remained almost stationary in 2007. In 2003 they achieved +9,6%, in 2004 +8,6%, in 2005 +16,8%, in 2006 +8,4% and only +0.7% in 2007."

"Over the past ten years, the median fund achieved an annualized return of +5,32% which is rather a meagre result for pension funds", he adds. "Main reason for this remains of course the extremely poor three year period 2000-2002."

Performance by asset class

The poor result of the median fund in 2007 (+0.7%) is mainly to be attributed to the investments in American and Japanese shares with returns over 2007 of respectively -6.7% and -15.5% and to investments in real estate (-18.9%). The investments in European shares (+0.8%) and bonds (+1.2%) could not increase the overall returns.

As far as equities are concerned, the Emerging Markets returned by far the best results (+18.4%). Equities in the Euro-zone achieved still a decent return of +4,4%.

The bad returns of American and Japanese equities can partially be attributed to the strong increase in value of the Euro in relation to the US Dollar and the Japanese Yen.

In contrast with prior years real estate achieved very bad results.  However, real estate only represents 3% of the total pension fund assets convered by the survey. 

Composition of the portfolios

Equities remain by far the most important investment category for Belgian pension funds, accounting for 48.0% of the assets. The bulk of assets (30.7%) were invested in European shares, followed by American shares at 8.4% and Japanese shares with only 1.7%. The rest is invested in emerging markets (2.7%) and global equity funds (3.8%).

Bonds are the second most popular investment category (with 38.0% of asset) and the largest allocation is in European bonds.

"Taking into account the investments in real estate as well as liquid assets, the European region pulls in no less than 72% of Belgian pension fund investments," commented Mr. Santermans.

Notes to the editors:

Over the past 10 years the returns of the median fund evolved as follows:

Analyse of the returns in 2007

Evolution of the portfolios

During 2007, the average composition of the portfolios changed as follows:

The category "other" concerns alternative investments such as convertable bonds, hedge funds, private shares etc.

The shifts in the portfolios in 2007 were rather limited: from shares with 2.5% into short term investments with 2.1%. Even when we take into account the differences in return, we see only limited shifts between the different investment categories. This indicates that Belgian pension funds remain in line with the pre-determined sector-allocation.

elgian pension fund performance against the market index

The applied indices are the MSCI indices for shares, JP Morgan for bonds and the EPRA Eurozone index for real estate.
 
The above table illustrates that the Belgian pension funds did not outperform the indexes in most of the investment categories during the past year.

About Mercer

Mercer is a leading global provider of consulting, outsourcing and investment services. Mercer works with clients to solve their most complex benefit and human capital issues, designing and helping manage health, retirement and other benefits. It is a leader in benefit outsourcing. Mercer’s investment services include investment consulting and multi-manager investment management. Mercer’s 17,000 employees are based in more than 40 countries. The company is a wholly owned subsidiary of Marsh & McLennan Companies, Inc., which lists its stock (ticker symbol: MMC) on the New York, Chicago and London stock exchanges.

Mercer Belgium was founded in 1977. Currently, Mercer has 80 employees in Belgium, including consultants, qualified actuaries and employees in the administration of pensions.

Envoyer par email

Imprimer

Question : Mercer Feedback