In the first half of 2024, LD Pensions achieved a total return of 4.9%. It was the equity investments in particular that generated strong returns for both The Cost-of-Living Allowance Fund and The Holiday Allowance Fund.
Members with accrued cost-of-living allowance funds in the largest investment pool, LD Discretionary, were credited with a return of 4.1% before pension return tax. The benchmark for LD Discretionary is a portfolio comprising 22% equities, 41% high-grade bonds and 37% credit investments. Returns of 12.5 per cent, 4.1 per cent and 1.7 per cent were achieved in the three asset classes respectively. Around 12 per cent of members have invested their savings themselves in LD Pensions’ various equity and bond funds. This group of members also achieved high returns, as members often invest funds in the equity funds.
Members with accrued holiday allowance funds were credited with a return of 5.9% after pension return tax. The majority of the value creation came from LD Pensions’ investment of approximately 72% of members’ assets. The invested holiday allowance funds yielded a return of 7.9%. In the investment portfolio’s benchmark, equities account for 65%, credit investments for 25% and high-grade bonds for 10%. These yielded returns of 12.7 per cent, 3.5 per cent and 1.6 per cent respectively. The single largest contribution to the positive result thus came from the equity investments.
In addition to the return on the holiday allowance funds invested, holiday allowance funds held by employers also contributed to the value adjustment of members’ funds. Holiday Allowance funds held by employers accounted for approximately 28% of members’ assets and contributed a return of 0.7%.
“The results for the first half of 2024 are satisfactory for our members. Our expectations for the second half of the year are subdued, due to the risk of an incipient slowdown in the US and European economies. Interest rate trends could prove highly significant, whilst a number of geopolitical factors may also influence the markets,” says Lars Mayland Nielsen, Director in LD Pensions.
Key facts
- LD Pensions’ total assets at the end of the first half of 2024 stood at DKK 46.8 billion, comprising DKK 24.9 billion held by The Cost-of-Living Allowance Fund and DKK 21.9 billion The Holiday Allowance Fund.
- In the Cost-of-Living Allowance funds, the entire membership is eligible for payouts. Payouts to members were therefore slightly higher than the return on investment, which meant that assets fell by DKK 0.3 billion.
- In the holiday allowance funds, assets rose by DKK 0.6 billion. This was because the return on investment more than offset the payouts.
