ATP, Hilleroed, Denmark, posted an investment return of -36.4% for the first half of 2022, as the investment portfolio suffered from falling stock markets and rising interest rates.
The pension fund said in its half-yearly update that the return on investment was equivalent to a loss of 58 billion Danish crowns ($8.2 billion), compared to a gain of 26.9 billion crowns for the same period. in 2021.
The return on investments for the first half of 2021 was 17.9%.
In particular, the pension fund suffered a loss of 48.4 billion crowns on investments in government bonds and mortgages, while its exposure to listed shares lost 20.4 billion crowns. The fund’s credit exposure lost 2.6 billion crowns.
However, there were some positive contributions to the investment portfolio. The fund’s holdings of inflation-linked instruments generated returns of 10.7 billion crowns, while real estate added 1.3 billion crowns, private equity added 500 million crowns, infrastructure won 200 million crowns and the other exhibitions earned 1.1 billion crowns.
The fund does not break down its allocation by asset class but rather by risk exposure. As of December 31, its risk allocation was 47% for equities, 32% for interest rates, 14% for inflation and 7% for other factors.
“It has been an unusually difficult first half, but our business model ensures that our members’ pensions remain unchanged despite turbulent financial market developments in 2022,” said Martin Praestegaard, CEO, in a press release accompanying the update. . “Even though ROI has been negative this year, ATP’s average returns are still over 10% over the past five years and ATP still has a healthy balance between the size of our collateral and our reserves in the self. -so-called bonus potential.”
The ATP warned in its update that the remainder of 2022 is expected to bring continued uncertainty to financial markets.
Assets totaled 732.6 billion crowns as of June 30, a decrease of 22.7% compared to the asset figures as of December 31 and a decrease of 20.8% compared to the figures as of June 30, 2021.