Investment returns July, August and September 2023
Over the past three months, the value of investments has fallen. The decline was most noticeable in government bonds. In addition, investments in corporate bonds fell slightly, but global equities also rose slightly as the dollar strengthened. Other investments, especially equities in Europe, fell by almost -3%. Within investment in loans and government bonds, the main reason for the changes was that interest rates have risen.
Across the various portfolios, these were the returns in the third quarter:
|
Real assets (e.g. shares) |
-1,0% |
|
Medium income (e.g. government and corporate bonds) |
-0,6% |
|
Fixed income long (government bonds) |
-5,0% |
|
Total portfolio (average) |
-1,6% |
In the third quarter of 2023, all portfolios ended in the negative. The main reason for the changes is the increased interest rates. The oldest age group notices this the most.
Returns and participation values by age category
Below you can see the investment results for your age group. If you click on one of the age categories, you can see the development of the participation value and the investment return over the past years and the months of this year. From the age of 57, you can choose whether you want to invest for a stable pension or a variable pension.
For those age groups, you will therefore see two choices. If it says (S), it is the results of that age group with a stable investment profile. If it says (V), it is the results of the variable investment profile.
What is a participation value?
A participation is your share in the investment fund of your specific age group within the pension fund.
What are the benefits of investing?
The money from your pension pot is invested by StiPP. Every month, we review the total investment results. Are the results positive? Then money will be added to your pension pot. Are the results negative? Then some money goes out. StiPP wants to achieve a good return for its participants from investing, but in a way that takes into account the world around us. You can find more information about this on Does StiPP invest in a socially responsible way?
StiPP invests in various asset classes. In this way, we spread the investment risks and strive for an optimal return. How much we invest in which category for you depends on your age. When you're young, we take on more investment risk. The older you get, the less risk we take. Unless you choose to invest a bit riskier. This can be done via 'Investing for a variable pension'. You can find more information about this on 'How does StiPP invest'.
E-Newsletter
The amount of your pension depends on the investment returns of the fund. StiPP therefore publishes the investment results every quarter via this website and in an e-newsletter. It will provide you with more information about how StiPP invests the pension money and we will answer a question about investing and pensions. Would you also like to receive this e-newsletter? Then log in to My StiPP Pension. There, under My Data > Change data > Subscriptions and communication, you indicate that you want to receive the financial developments newsletter.
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Notes on previous quarters
Looking at the results of the returns in the various portfolios of the past quarter: The "corporate securities portfolio" achieved a positive result, thanks to European equities. The "fixed income" portfolios were negatively impacted by rising interest rates. The "fixed income long" portfolio (which only includes government bonds) was clearly more affected by this than the other fixed income portfolio and had a return of -3.4% this quarter. As a result, the older age groups had negative returns this quarter, while the younger age groups benefited from the stock market and thus experienced positive returns.
The pension capital of the oldest participants was hit the hardest by rising interest rates. What does this mean for the pension benefits of participants who are about to retire? Fortunately, not much. The expected pension benefit for participants in the oldest age group (65-66 years) has remained virtually unchanged. This is because the high interest rate ensures that a higher monthly pension can also be purchased with the accrued pension capital. Do you have a small pension? Then the pension will be bought off. Your pension capital has become less valuable due to the negative returns. This means that the surrender amount has become lower.
The distribution between the portfolios is different in each age group. As a result, the return achieved is also different in each age category. Investments yielded less for all age groups. The oldest participants were most affected by rising interest rates.
A small ray of hope for participants who are retiring now: the high interest rate ensures that a relatively higher monthly pension can be purchased with the accrued pension capital. Unfortunately, participants who surrender their pension on their retirement date saw their surrender value decrease.
For members in the highest age group (65-66), this does not mean that their future pension has deteriorated. On the contrary. The rise in interest rates has also made pension purchases less expensive. On balance, therefore, pension purchases for older participants improved last quarter.