De Nederlandsche Bank published new statistics showing Dutch pension funds’ total investment value fell by EUR 54 billion (3%) in the first quarter of 2025, with foreign exchange movements, rather than equity market declines, the main driver of losses on foreign holdings. The foreign exchange hit was partly offset by gains on currency-hedging derivatives. At quarter-end, pension funds managed EUR 1,771 billion of assets, including around EUR 808 billion invested in non-euro currencies, largely US dollar exposures (EUR 551 billion), of which EUR 450 billion related to investments in the United States. The US dollar depreciation generated an estimated EUR 24 billion loss (4%) on US dollar holdings, compared with EUR 3 billion (1%) from other currencies; price falls contributed EUR 11 billion of losses on foreign-currency investments (1.3%) and EUR 16 billion on euro investments (1.7%). Derivatives produced an EUR 11 billion gain in the quarter, offsetting around 40% of foreign exchange losses; DNB notes pension funds typically hedge only part of FX risk, mainly on fixed income, given derivative costs and collateral requirements, and because equity prices and the US dollar often move in opposite directions. DNB also explains the statistics use a look-through methodology that includes underlying assets and liabilities held indirectly via Dutch investment funds, rather than only direct pension fund investments.
De Nederlandsche Bank 2025-06-17
De Nederlandsche Bank data show Dutch pension funds lost EUR 54 billion in Q1 2025 mainly from US dollar depreciation
De Nederlandsche Bank reported a EUR 54 billion (3%) decline in Dutch pension funds' investment value in Q1 2025, mainly due to foreign exchange losses. The US dollar depreciation caused a EUR 24 billion (4%) loss on US dollar holdings, partially offset by EUR 11 billion gains from currency-hedging derivatives. Pension funds managed EUR 1,771 billion in assets, with significant US dollar exposure, and typically hedge only part of their foreign exchange risk.