The Netherlands' two largest pension funds — ABP and Zorg en Welzijn — returned 13.5% and 12.5% in 2010, respectively.
Assets at Stichting Pensioenfonds ABP, Heerlen, rose to €237 billion ($324 billion) for the year, while Pensioenfonds Zorg en Welzijn, Zeist, reached €99.5 billion during the same period.
In 2009, ABP returned 20.2% while PfZW returned 17.6%.
ABP had investment gains in every asset class except inflation-linked bonds, according to preliminary results released Thursday. Private equity, emerging markets and infrastructure were the best-performing asset classes, at 29.4%, 26.6% and 23.5%, respectively.
Among ABP's new asset classes added last year, alternative inflation-linked assets and illiquid commodities investments each returned 10.3%. Inflation-linked bonds returned -0.2%.
Overall, 55% of total assets were allocated to equities — including emerging markets, 7 percentage points; private equity at 5.5 percentage points; and infrastructure, 0.3 percentage points. Fixed income — which comprises government, inflation-linked and corporate bonds — was 39.3% of total assets. The remainder was primarily invested in hedge funds and global tactical asset allocation strategies, according to the report.
At Zorg en Welzijn, top-performing asset classes for the year included structured credit, which gained 31.8% for the year. Private equity returned 31.2%. PfZW's interest rate and inflation strategy returned 15.6% for the year, but non-euro inflation-linked bonds fell 6.2%.
Equities — including private equity, 6.9 percentage points; real estate, 13.9 percentage points; high-income bonds, 3.2 percentage points; and certain alternatives — comprised 63.1% of the total portfolio as of Dec. 31. Commodities account for 7% of the portfolio, with the remainder invested in the fund's interest rate and inflation risk portfolio, which includes the interest rate and inflation strategy along with other asset classes such as credit.
ABP's funding ratio increased to 105% in 2010 after accounting for higher longevity risks, compared with 104% the previous year, according to data from ABP. PfZW's funding ratio decreased to 104% on Dec. 31 compared with 108% a year earlier, partly because of a decline in the interest rate used to measure liabilities and increased life expectancy among members, according to the fund's preliminary financial update.