Investments

As of 31 December 2011 PensionDanmark had EUR 16 bn under management. In the coming years the net inflow of pension contributions will amount to more than EUR 1bn on an annual basis. By 2016 assets under management are expected to exceed EUR 24 bn.

Assets under management, 2002-2020 (billion EUR)

Investment objective and asset allocation

PensionDanmark's long term investment objective is to ensure the highest possible buying power of our member’s pension savings – i.e. achieving the highest possible investment return after inflation, taxes and costs with a prudent level of risk.

Contrary to most Danish pension funds, PensionDanmark is working without guaranteed minimum yields, which enables the fund to invest with a long term horizon to the benefit of the members. Most investments are managed in a lifecycle product, where

• Members under age 41, have their savings invested in a way where slightly less than half of the investments are allocated to equity and non investment grade credit.
• When members turn 41, their savings are gradually switched into more conservative and less volatile holdings as they near retirement age.

The Strategic Benchmark

On an annual basis the Board determines a strategic benchmark (SBM). The SBM reflects the funds medium to long term strategic asset allocation, and provides an efficient balance between risk and return in the light of the funds' risk tolerance. Furthermore the SBM serves as a yardstick against which the funds performance can be measured. The Board also sets limits to how much the actual asset allocation can divert from the SBM due to short term tactical considerations.

The table below shows the 2012 Strategic Benchmark for PensionDanmark’s Basispulje and the fund for 65 year old members.