NETHERLANDS – An increasing number of Dutch pension funds are investing in residential mortgages, according to Syntrus Achmea.
According to the asset manager, 10 pension funds have committed €600m in total to its residential mortgages fund last year.
As a result, the invested assets have risen to €2.5bn, while the number of participating pension funds increased to 38.
Syntrus Achmea said schemes were considering not only diversification and the risk/return profiles of their investments, but also the spread.
Hugo Ouwehand, mortgages director, said: "Whereas we must account the investments against the swap rate, we achieve a margin of 250 basis points."
He added that the yearly returns have been 5.6% on average during the past five years.
Syntrus Achmea is lending the invested assets directly to homebuyers.
Ouwehand pointed out that the residential mortgages fund did not have a specific growth target.
"Our aim is a responsible increase, focusing on mortgages with a low-risk profile," he said.
The large asset managers APG and PGGM, however, said they had not noticed a significant increase in demand for mortgage investments from their combined 11 clients.
But spokesmen for both companies said their clients' interest was likely to increase if the proposed national body issuing state-backed mortgages gets the go-ahead.
A working committee is looking into the feasibility of such an institute.