It was primarily the global equity markets that generated strong returns for you as a member. Bonds and credit investments also delivered solid returns. 

LD Discretionary

LD Discretionary, the flagship product of The Cost-of-Living Allowance Fund, achieved an attributed return of 8.1% in 2024 after costs. Over the past two years, the return has been 18.9%.

89% of the fund’s assets are invested in its flagship product, LD Discretionary, which is an actively managed portfolio comprising shares and bonds.

The majority of the cost-of-living allowance funds are invested in bonds and the credit market. Following several years of very low bond yields, the rise in interest rates in 2022 and 2023 has meant that these investments are once again generating solid returns, thereby boosting your savings.

In 2024, the return on LD Discretionary was further boosted by sharp price rises on the global equity markets. Although equities accounted for just over 20 per cent of LD Discretionary’s investments, they contributed almost half of the total return. Danish equities, by contrast, underperformed and delivered a small negative return. At the same time, both the strategic currency hedging and the settlement portfolio dragged the return down slightly.  

LD Discretionary continues to meet expectations of stable and strong long-term returns.

The portfolios

As a member of The Cost-of-Living Allowance Fund, you are free to choose to invest your savings in five different portfolios in addition to LD Discretionary. There are three equity portfolios and two bond portfolios to choose from. Fund selectors particularly favoured the equity portfolios in 2024.

In 2024, there was a significant difference in returns across the three equity portfolios. LD Global Equities came out on top with a return of 23.6%. This reflects, in particular, a strong US equity market with very significant price rises amongst the largest technology companies and a strengthening of the US dollar against the Danish krone. Over the past two years, the portfolio has delivered a total return of just under 45 per cent.

LD Environment & Climate achieved a return of 15.6%. The portfolios invest primarily in companies within the alternative energy, resource optimisation and environmental protection sectors. The portfolios’ return was lower than that of the global equity market, which is largely due to the fact that LD Environment & Climate does not invest in the largest US technology companies.

LD Danish Equities recorded a negative return of -0.8% in 2024. This was mainly due to developments in the latter part of the year, which saw significant losses on Novo Nordisk.

The two bond portfolios have once again emerged as attractive investment opportunities, with returns of 4.6% for LD Short-Term Bonds and 5.3% for LD Mixed Bonds.

You can choose at any time to invest your savings in any of the five portfolios other than LD Discretionary. You can perform a portfolio selection by logging into the self-service portal.

You can view the current returns for all our portfolios here every day.

We are committed to addressing the social and climate-related impact of our investments. You can read more about our work on responsible investment here.

Morningstar analyses performance using a rating scale of between 1 and 5 stars. The rating covers investments in listed shares and bonds, which account for 99.7% of LD Discretionary. As at 31 December 2024, LD Discretionary’s listed investments were awarded a full 5 stars. It is an impressive achievement to secure a top ranking in a comparison of nearly 1,000 European investment funds. This confirms that its returns have been among the top 10 per cent of investment funds with moderate risk in Europe. The rating varies from month to month, and here at the start of 2025, LD Discretionary continues to hold a 5-star rating. LD Discretionary’s listed investments have consistently ranked in the top third for the past 10 years.

Bond funds at the very top

LD Pensions’ bond funds, LD Short-Term Bonds and LD Mixed Bonds, also performed well over the year, with returns of 4.6% and 5.3% respectively. Morningstar has awarded both portfolios a top rating of 5 stars as at 31 December 2024.

You can view the ratings for all portfolios under The Cost-of-Living Allowance Fund here:

The year began with concerns as to whether the interest rate rises implemented by the European and US central banks in 2022–23 would lead to an economic downturn, rising unemployment and lower consumption. However, things turned out far better than expected – particularly in the US, where the growth outlook improved significantly over the course of the year. In Europe and China, growth was more subdued, but overall there was solid progress in the global economy.

The equity markets delivered particularly high returns in 2024. A strong labour market and easing of monetary policy underpinned economic growth and, consequently, corporate profitability, and the broad US share index, the S&P 500, rose by over 20% during the year. The dominant theme of the year was the sharp rises in share prices among the seven largest US technology companies, the so-called “Magnificent 7”. At the end of the year, these seven companies accounted for over a third of the S&P 500, which is a historically high level. The rise was driven by a significant increase in the companies’ profitability, but also by market expectations of productivity gains from, amongst other things, artificial intelligence. Danish shares, which make up only a small part of the equity portfolio, performed poorly overall in 2024, with the C25 index ending the year slightly in the red. This was due, amongst other things, to falling share prices for Novo Nordisk and Vestas. 

In 2024, the major central banks began to ease monetary policy following several years of tight financial conditions. At the start of the year, market participants had expected interest rate cuts of around 1.5 percentage points. However, the economy and the labour market proved more resilient than anticipated, and inflation did not ease quite as quickly as expected. Consequently, both the European and US central banks chose to cut their key interest rates from the summer onwards, by a total of 1 percentage point over the course of the year.

The return on safe bonds with medium-term maturities was 4–5% in 2024. At the end of the year, interest rates remained at a level that offers the prospect of reasonable returns going forward. Robust economic growth and increased risk appetite led to price rises in credit investments, driven by a narrowing of credit spreads. This contributed to a healthy return on credit investments of 7–8%.

2024 was thus a good year for investment across all asset classes, with investors remaining confident of future growth despite a world facing significant challenges in the form of war, trade tensions and high levels of debt in many of the largest economies, including the US.

The value of your savings changes from day to day. This happens when we update the prices for LD Discretionary and the other portfolios once a day. The changes reflect developments in the equity and bond markets. 

If you’re thinking about withdrawing your savings, it might be a good idea to check the returns on the portfolios in which your savings are held.

If you request payouts using MitID via the self-service portal on ld.dk, it will generally take 24 hours before the value of your savings is locked in and is no longer affected by movements in the share and bond markets. This means that the value you see when you request payouts may change, even though we process your payout request as quickly as possible.

You can view the current returns on the portfolios here every day.

You can view your savings, see how they are allocated across different portfolios, and request payouts by logging into the self-service portal.