Each year, Mercer’s Pension Investment Performance Survey (PIPS) analyses the returns of 80 active funds which represent about 50% of all active corporate pension funds in Belgium. Based on a limited sample of 40 funds surveyed, Belgian pension funds achieved a decent median return of +4.9% over the year 2015. The bulk of the profit can be attributed to equities (+ 8.8%) whereas bonds achieved a meagre +0.5%.
The best returns were achieved in the Japanese stock market and the real estate sector with respective returns as high as +21.3% and +18.4%. The Euro zone and U.S. stock markets also yielded very decent returns with +11.8% and +11.2%, respectively.
These excellent Japanese and US results are attributable in part to the weakness of the Euro: the U.S. Dollar increased 11.8% in value and the Japanese Yen increased by 11.1%. The weakest return was achieved by investments in the emerging markets with (-6.0%) for equities (-0.5%) for corporate bonds.
On the longer term – which is the investment perspective that corresponds best with the objectives of pension funds - the overall situation is also positive. Over a 5, 10,20 year period, corporate pension funds achieved an actual return, after inflation, of respectively +5.5%, +2.2% and +4.3% per annum.
The asset allocation over the different asset classes over 2015 is as follows:
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