Farmakonomer, the €1.06bn pension fund for pharmacists, has topped the list as Denmark’s best performing life and pension fund with 2005 returns of almost 20 per cent, according to Kirstein Finans’ Life and Pension study.

Farmakonomer pulled in returns of 19.9 per cent and outperformed JØP, the fund for Danish lawyers and economists, by 1.1 percentage points. The results show a clear strengthening of the fund’s position. In last year’s study it outperformed the second best fund, ATP, by 0.2 percentage points. Farmakonomer’s investment portfolio consists of Danish bonds (59.7 per cent), foreign equities (17.5 per cent), Danish equities (9.5 per cent), property (8.1 per cent), foreign bonds (3.3 per cent) and other equities (1.9 per cent).

The report, which took in 47 life and pension funds with €233.7bn of assets under management, found that the investment performance of a number of funds improved notably during the year, particularly JØP, which moved up from fifteenth to second position this year. Likewise the €622m architects’ pension fund, which was rated forty-first in 2004 moved up to third place. At the end of 2005, the architects’ portfolio consisted of Danish bonds (30 per cent), foreign equities (23 per cent), foreign bonds (13 per cent), property (15 per cent), Danish equities (10 per cent), index-linked bonds (8 per cent) and cash (1 per cent).

A similar improvement was noted by the €184m PHI Pension, which improved its position from 39 to ninth. At the end of 2005 the fund’s portfolio was made up of Danish bonds (45.4 per cent), index-linked bonds (12.5 per cent), foreign equities (25.1 per cent), Danish equities (10.7 per cent), foreign bonds (3.7 per cent) and other investments (2.5 per cent). The study found that the investments of all institutions yielded an average return of 13.6 per cent.

The worst performing funds were Alka Liv and one of PKA’s funds, PKA+, which also came in last in last year’s study.

According to Finanstilsynet, the Danish financial supervisory authority, Danish company pension funds reduced their bond and equity holdings in 2005. In 2004 the two asset classes made up 81 per cent of average holdings but that figure has slipped to 75 per cent. Danish company pension funds have 62 per cent of their assets in bonds and 13 per cent in equities. Bond portfolios are mainly invested in Danish bonds (90.8 per cent) but most equity holdings were invested abroad (76.8 per cent). The rest is allocated to investment funds (14 per cent), property (6 per cent) and other equities (5 per cent).

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