P+ delivered good returns in the first half of the year. And despite the current market turmoil, expectations for 2024 remain positive.
The first half of 2024 resulted in good returns for the members of P+. At the end of June, the return for members with an average rate scheme was thus 5.2 per cent, while members with the market rate scheme P+ Life Cycle and medium risk had a return of 7.7 per cent.
The half-year return was largely driven by listed equities and other riskier asset classes, with the large US technology companies in particular performing exceptionally well. However, the market development changed significantly over the summer.
“In July, we experienced subdued optimism in relation to the general economic growth picture, as well as a number of somewhat disappointing accounts from the large technology companies. This led to falling interest rates and a flat development on the stock market, and the month’s return was thus primarily driven by rising bond prices,” says Jasper Riis, investment director at P+. He continues:
“August began with weaker economic figures than expected, and this increased nervousness and uncertainty in the market. As a result, we experienced further price falls on the stock markets, which took some unusually large price fluctuations.”
Expectations remain positive
However, the current market turmoil comes after a long period of positive market sentiment and very high returns, especially on the stock market. The overall picture across asset classes year to date is therefore still positive.
“Although the price fluctuations at the beginning of August may seem violent, it is worth remembering that the stock market only fell to the level from April. The setback came on the back of an extraordinarily positive first half of the year, and this means that the return for our overall portfolio is still at a level that we would consider normal for the period,” says Jasper Riis.
At the same time, he emphasizes that P+ works with a long investment horizon – and that a period of exchange rate fluctuations is not necessarily problematic in the long term.
“A pension is a long-term investment, and although we of course regularly make small adjustments to the portfolio, we do not change our basic investment strategy and risk approach. So we still expect a reasonable return for the year overall,” says Jasper Riis.
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