Your pension, your future
Love your future. Shell Pension.
Your pension, your future
Love your future. Shell Pension.

November 2020

Investment results 2020

2020 was an exceptional and spectacular investment year. At the beginning of the year, the rapid spread of the coronavirus and the lockdown measures caused the fastest ever correction in shares. How did SSPF perform in that extraordinarily challenging year?

Current developments:

  • Significantly negative returns in the first quarter of 2020.
  • In the following quarters, financial markets showed their resilience.
  • The intervention by governments who introduced massive support schemes to keep the economy going and the intervention of central banks who did not hesitate to use their full range of resources to stimulate the markets.
  • The election of Joe Biden as US President and the arrival of the first vaccines on the market (accompanied by high vaccine efficacy) in November have also influenced the markets positively. 
  • Despite the very turbulent year, shares ended the year with a positive return.
Figure 1. Development of shares in developed markets
(MSCI World Total Return Index in EUR). Source: Bloomberg
Hier graag de vertalde stukje! Maecenas tempus, tellus eget condimentum rhoncus, sem quam semper libero, sit amet 
Development of the interest rate (20-year euro swap interest). Source: Bloomberg.
Development of the interest rate (20-year euro swap interest). Source: Bloomberg.
Development of the interest rate (20-year euro swap interest). Source: Bloomberg.

In depth:

  • Subportfolio Return Seeking Assets aims to achieve return, achieved a return of 4.1 per cent.
  • This positive return is mainly due to the strong performance of Shares, Private Equity and Hedge funds. 
  • Hedge funds have shown in 2020 to be of great added value in both downward and highly volatile financial markets.
  • The Hedge Fund category outperformed by 4.7% by investing in the right fund managers and strategies. 
  • Only the real estate and other alternative investment categories showed a negative return over 2020 of -4.4% and -3.2% respectively. 
  • The negative performance of the Real Estate portfolio is partly due to the low valuation of office buildings and shopping centres, which have not performed well in times of corona (when working from home and lockdowns prevailed).
  • The Matching portfolio, which aims to keep up with the value of liabilities, achieved a return of 13.3 per cent. 
  • This portfolio has a deliberately high interest rate sensitivity. Due to the sharp fall in interest rates, the portfolio achieved a high return.
  • The Liquidity & Investment Grade (IG) assets portfolio achieved a positive return of 1.8 per cent and outperformed the benchmark by 0.4 per cent. The outperformance was partly due to the investments in Dutch mortgages, the investments in AAA Collateralised Loan Obligations (CLOs) and keying into low inflation expectations in 2020.

Good to know

  • Overall, SSPF achieved an investment result of 4.5 per cent.
  • The invested assets grew from 30.3 to 31 billion euro.
  • It thus scored 0.2 percent better than the benchmark.
  • The asset management costs were 0.65 per cent.
  • The average investment result over the past 10 years is plus 7.8%.
  • The policy coverage ratio for 2020 is 108.4 per cent.
  • This means that no indexation can be carried out. By law SSPF is only allowed to index once the coverage ratio is structurally above 115 per cent.
  • The interest rate has fallen by around 0.6 percent in 2020.
  • Falling interest rates result in positive results on our bond portfolio. At the same time, the fall in interest rates has a strong upward effect on the value of the fund's future pension payments (liabilities).
  • In total, 810 million euro in pensions were paid out.
  • SSPF has 18,780 pensioners.
  • 32,368 participants.