LD Discretionary, which is the largest investment fund within The Cost-of-Living Allowance Fund, generated a return of 4.2% in the first half of 2026, whilst the return for The Holiday Allowance Fund was 5.5%.
The stock markets have performed strongly in the first half of the year, and it is encouraging to see that members’ savings have once again increased during what has otherwise been a turbulent period.
Shares, in particular, boosted returns
LD Pensions’ equity portfolios delivered strong returns in the first half of the year. Equity returns were particularly high in emerging markets and in climate- and environment-related companies. Conversely, Danish equities continued to lag behind the global equity market. Bonds and credit investments delivered positive, but more modest, returns.
In LD Pensions, the majority of the fund’s dollar exposure is hedged to limit fluctuations in members’ savings. This resulted in a significant gain in 2025 when the dollar fell. Conversely, currency hedging has dragged down returns in the first half of 2026, when the dollar has rebounded.
That is why returns vary
The return on the Employees' Holiday Allowance Fund was higher than that of LD Discretionary. This is due to a significantly higher proportion of shares in the holiday allowance funds compared with the cost-of-living allowance funds. When the equity markets rise sharply, this has a greater impact on holiday allowance funds. Conversely, it will lead to greater losses for holiday allowance funds when the equity markets fall, as we saw briefly during March.
The difference in returns does not reflect that one portfolio is managed better than the other, but rather that the two funds have different investment horizons and, consequently, different risk profiles. Members of the Cost-of-Living Allowance Fund have the option of adjusting their risk profile themselves by investing all or part of their savings in the pure equity and bond funds.
Continued long-term focus
Uncertainty remains high, and navigating an unpredictable market has become the new normal for investors. In LD Pensions, clear risk parameters have been established for its portfolios, which are actively managed with a focus on securing the best possible returns for members, whilst limiting the risk of loss.
See also the news article ‘Strong stock markets ensure solid returns’ dated 23 June 2026
