ATP, Hilleroed, Denmark, posted a 21.7% return on its investment portfolio for the three months ended March 31 on strong performance from government and mortgage bonds and a rebound in equities.
An update Tuesday said the pension fund's gain equaled 20 billion Danish kroner ($3 billion) in its historically best first quarter, compared with a return of -1% return, or a loss 1.13 billion kroner, for the three months ended March 31, 2018.
Assets increased 6.6% to 837.5 billion kroner from Dec. 31, and grew 2.2% year-over-year.
The fund's investment portfolio is split according to risk factors. As of March 31, equity risk accounted for 42% of the portfolio; interest rate risk for 33%; inflation risk was 17%; and the remaining 8% was attributable to other risk factors.
For the three months ended March. 31, the biggest contributing asset class was government and mortgage bonds at 7.3 billion kroner. International and listed Danish equities gained 4.9 billion kroner and 3.7 billion kroner, respectively.
Private equity added 991 million kroner. Real estate gained 586 million kroner; infrastructure added 273 million kroner.
Credit added 1.75 billion kroner, and inflation-related instruments added 210 million kroner from the investment portfolio. Other investments added 248 million kroner.
"We have realized an unusually good result for the first quarter of 2019 and delivered a very high return, which is highly satisfactory," acting CEO Bo Foged said in a news release accompanying the update. But, he said, "we can also look forward to generally lower investment returns in the years to come and at the same time we are seeing greater fluctuations between quarters."
In March, the Danish Parliament passed a mandatory pension fund, Obligatorisk Pensionsordning, for citizens who receive transfer payments from the government. The mandate will boost ATP's assets starting in 2020.
"This is an important assignment, and we are proud to have been selected to handle it," Mr. Foged said in the release. "ATP exists to secure basic financial security in Denmark, and Obligatorisk Pensionsordning is precisely about that,"