How did the financial markets perform?
Equities
In late February and early March, the war in Ukraine caused sharp drops in equity markets. Although most stock exchanges have since bounced back, 2022 has to date been a bad year for equity investors. Price losses ranged from 2% to 6%. This was caused not just by the war and Chinese lockdowns – inflation fears, rate hikes and the threat of even higher interest rates also contributed to the gloomy market sentiment.
Bonds
In times of uncertainty, bond markets frequently offer a safe haven to investors. However, this held true for only a very short time after the war had begun. Early March, yields on European government bonds dipped briefly and then soon went up again. As a result, European government bond funds yielded exceptionally poor returns in the first quarter of 2022 (-6% to -11%). Corporate bonds performed slightly less poorly (-5%).
“The investments of the a.s.r. Employee Pension are spread across many countries and sectors. Through externally managed funds, we have very limited exposure to Russia (0.3%) and Ukraine (0.05%). We see that Russia is being increasingly isolated from the financial markets. We will reduce our investments in Russia as soon as we can.”