AXA IM’s Barometer – The Great Dutch Bond Billions Rotation

The Dutch pension industry is the fourth largest in the world and it is about to become a €1.7 trillion building site, moving from a regulatory-driven framework in the Great Rotation to an economically-driven one. The pension funds will shift from defined benefit to defined contribution structures and naturally, because today they’re in DB schemes in a regulatory -based system, a large part of that portfolio, roughly €560 billion, is being allocated to government bonds, with a much smaller  proportion (€230 billion) allocated to credit bonds. Going forward, we expect that allocation to sovereign debt to halve -- and to credits to double -- with the transition to an economic system

In order to help Dutch pension funds navigate the road to the new DC system and the corresponding Great Rotation within their fixed income portfolios, AXA IM had launched an easy to understand ‘Bond Performance Barometer’ infographic, which will be published on a quarterly basis together with analytical commentary. The barometer indicates the relative ‘weather,’ or return spread, for institutional investors allocating between government bonds or corporate bonds of the same credit rating.

AXA IM's Barometer

Find the latest insights on spread and yield developments for govies and credit

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