COPENHAGEN, April 30 (Reuters) - Denmark’s largest pension fund, ATP, reported the best quarterly return ever on its investment portfolio on Tuesday, but its chief executive cautioned that the end to a decade-long market upturn was near.
ATP, Europe’s fourth-largest pension fund with around $120 billion of assets under management, achieved a record investment return of 20 billion Danish crowns ($3 billion) before costs and taxes in the first quarter, equivalent to a rate of return of 21.7 percent.
The previous five years the fund has realised an average investment portfolio return rate of 3.9 percent per quarter and positive returns in 17 of the previous 20 quarters.
The first-quarter return was boosted by external factors such as rising equity markets and falling bond yields, interim chief executive Bo Foged told Reuters.
Internal efforts to improve the construction of the fund’s portfolio also had a positive impact.
“A team has worked dedicated with an ‘all weather portfolio’ which can perform well in both tail and headwind,” Foged said.
However, he warned that there would be more volatility going forward and that the upturn seen over the past decade was nearing the end of its cycle.
“We don’t imagine that it will keep growing to the sky, it rarely does”.
Foged acts as CEO of the mandatory pension scheme with 5.206 million members after former chief executive Christian Hyldahl stepped down following criticism of the tax policies at a bank unit he ran a decade ago. ($1 = 6.6598 Danish crowns) (Reporting by Stine Jacobsen; editing by Emelia Sithole-Matarise)