Positive returns across all asset classes and a high level of hedging against exchange rate risk contributed to a solid return that was higher than expected.

LD Discretionary, the flagship product of The Cost-of-Living Allowance Fund, achieved an attributed return of 6.2% in 2025 after costs.

Over the past three years, the total return has been 26.3%. An average savings balance of 60,000 kr. at the end of 2022 has therefore increased by almost 14,000 kr. over the course of three years to 73,940 kr. in 2025.

90% of the fund’s assets are invested in its flagship product, LD Discretionary, which is an actively managed portfolio comprising shares and bonds.

Positive returns across all asset classes and a high level of hedging against currency risk contributed to the solid return. Equities delivered a return of 12.5% after currency hedging. In addition, credit contributed a return of 6.5%, private credit 5.1%, whilst high-grade bonds delivered a return of 2.6%.

The majority of LD Discretionary’s assets are invested in bonds and the credit market. The proportion of equities and high-grade bonds was increased slightly, whilst credit investments were reduced. Both high-grade bonds and credit investments delivered a solid excess return of 1.3 and 0.4 percentage points respectively.

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

As a member of The Cost-of-Living Allowance Fund, you are free to choose to invest your savings in five different investment funds. In addition to LD Discretionary, there are three equity funds and one bond fund to choose from.

You can choose to have your savings invested in all five portfolios at the same time, or simply supplement your allocation in LD Discretionary with one or two other portfolios. Fund selectors particularly favoured the equity portfolios in 2025.

The return

All portfolios achieved positive returns in 2025. The LD Danish Equities portfolio delivered the highest return of 10.6% after costs, outperforming its benchmark. Due to restrictions on the size of individual investments, the portfolios were relatively well protected against the sharp fall in Novo Nordisk’s share price.

LD Global Equities had a return of 6.6%, which was lower than its benchmark. The global equity market outperformed the Danish market, but the sharp fall in the dollar dragged down the return, measured in Danish kroner, as the pure equity funds are not currency-hedged.

The LD Environment & Climate equity fund posted a modest return of 2.4 per cent, which, in addition to the fall in the dollar, was due to headwinds affecting green investments in general.

LD Bonds delivered a return of 2.7 per cent, which was in line with its benchmark.

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

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

We are committed to considering how our investments affect society, both socially and in terms of climate impact. You can read more about our work on responsible investment here.

2025 turned out to be a good year for investment, with positive returns on shares, bonds and credit investments. At the start of the year, the launch of the Chinese AI model, DeepSeek, triggered a fall in the prices of US technology shares. The turmoil became more widespread and culminated following the announcement of substantial US tariff increases on 2 April. However, the equity market recovered towards the summer, partly as a result of postponements and downward adjustments to the tariff rates.

Global economic growth exceeded expectations in 2025 despite the financial turmoil. In the US, significant investment in artificial intelligence (AI) infrastructure underpinned growth. At the same time, both European and US companies demonstrated a high degree of adaptability to the new trading conditions, which was reflected in strong financial results. This contributed to the stock markets delivering high returns.

In the US, the rise in share prices was broad-based, but continued to be led by some of the largest US technology companies. In Europe, improved growth prospects and extensive fiscal policy initiatives contributed to the sharp rises in share prices. In Denmark, sharp falls in share prices, including those of Novo Nordisk, led to a more subdued performance.

The year was also characterised by global monetary policy easing. However, the prospect of significantly higher bond issuance in Europe caused European bond yields to rise. This led to capital losses on high-grade bonds, which consequently generated a lower return than in the previous two years. The strong economy led to a strong year for credit investments as a result of narrowing credit spreads.

The US dollar fell sharply in 2025, primarily due to increased uncertainty surrounding trade policy and concerns about the direction of US fiscal policy. This had a negative impact on many Danish investment funds, but the investments held by LD Pensions were well protected by a high level of hedging against currency exposure to the US dollar, which boosted members’ returns.