APG invests in different ways. From private investments to major listed companies. Needless to say, there is an idea behind that: our policy. What do and don’t we invest in? What requirements do companies have to meet? And does that always work out well? For these stories and backgrounds, click here.

Long-term investment
Collection Contents
4 Publications

“Will the computer chip shortage lead to inflation?”

Published on: 17 June 2021

Current issues in the fields of economics, (sustainable) investment, pensions and income: every week an APG expert gives a clear answer to the question of the week. This time: chief economist Thijs Knaap, about the economic consequences of the worldwide shortage of computer chips.


“The simplest and most immediate effect is that chip machine manufacturers are doing well. As of the end of October, ASML’s share price has now risen by 85 percent, while the AEX has risen ‘only’ 37 percent over that period. But of course, this will not continue. For an investor in chip machine manufacturers, it is helpful to know that the demand for chip machines has some of the same characteristics as the hog cycle. When the demand for pork chops - and therefore the price - is high, hog farmers expand. On the other hand, when that new meat comes onto the market, there is immediate excess, which then brings the price down. The same is true of the market for chip machines. As with pig farmers, it takes a while for new supply to be created. This carries the risk that in a few years there will be a surplus of chip machines and chips. An investor in chip machine manufacturers must therefore know exactly when to stop.”

The indirect effect of the chip shortage is much greater, Knaap explains. “You can’t think of anything without a chip in it nowadays. The shortage is a well-known bottleneck for car manufacturers, but it is currently affecting the entire supply industry. When it doesn’t get enough chips, it also leads to a shortage of other parts. There is a risk that the Western economies will stall because of this shortage.

Everything is expensive now, not only chips but also oil. If the prices of many components and semi-finished goods go up, in the worst-case scenario a situation similar to the oil shocks of the 1970s will arise. The big question hanging over the market is: will it lead to inflation? That is the fear of many investors. Central banks are now pursuing a loose monetary policy by buying up government bonds and corporate bonds, among other things. This is good for investors, because it pushes up the prices of bonds and shares. But if inflation does occur, central banks lose the excuse to pursue this broad monetary policy. They must then stop buying bonds and in that case the mechanism works the other way round. The chance for stock markets to fall increases and, because the current monetary policy has been pursued since 2008, you could even see a major correction. It may be a bit of a shock to investors.”

Crypto currency
The main cause of the worldwide shortage of chips was the extremely high demand caused by the Covid-19 pandemic. Working from home, and the increased demand for game consoles in particular, played a role in this. Still, according to Knaap, that’s not the whole story. “The demand for chips has also increased due to the increased popularity of crypto currencies. A lot of chips are needed to mine bitcoins. And there is also a lot going on on the supply side. In the early 2020s, many companies in Asia were at a standstill due to lockdowns. You can still see that in the availability of goods, including chips. Plus, Covid-19 made us ask ourselves whether we want to be so dependent on foreign producers for certain products - mouthguards, medical equipment, and so on. The answer is no. There will be more production in Europe and the US again, rather than in China. That’s good for our independence. But it does mean that everything will become more expensive.”

Volgende publicatie:
Why does Dutch pension money pay off so well?

Why does Dutch pension money pay off so well?

Published on: 27 November 2020

What catches the eye first in the OECD report “Pension Markets in Focus 2020” published earlier this month, is the investment returns obtained on pension assets in the Netherlands (in the second and third pillars, i.e. pension funds or insurers). With a return of 13.7 percent, the Netherlands was surpassed only by Ireland (18.5 percent). A superior performance? Ronald Wuijster tempers the enthusiasm: "The return from one year doesn’t mean anything to me. Our clients' obligations are long-term in nature, so APG also invests for the long term. The returns over five, ten and fifteen years are relevant to us".


Strong logic

In terms of average annual yield over a fifteen-year period, Colombia (6.2 percent), the Dominican Republic (6.8 percent) and Uruguay (5.2 percent) performed best. But the Netherlands and Canada were also among the global leaders with a figure of around 5 percent. This is not only due to skill.

Wuijster: "Certainly, we have a well-structured investment policy, we've given it a lot of thought via ALM (Asset and Liability Management, matching your investments to your short- and long-term payment obligations, ed.). We have a long-term orientation, well-targeted investment solutions, and we respond to sustainability. This quality as an investor certainly contributes to the strong Dutch performance over the past fifteen years. But that performance also has to do with the fact that Dutch pension funds are the only ones to have an interest rate hedge (a way of limiting exposure to the investment risk of falling or rising interest rates, ed.). This hedge is not mandatory in itself, but there is a very strong logic to applying the FTK".


Seriously contributed

The FTK (Financial Assessment Framework, part of the Dutch Pensions Act) stipulates the statutory financial requirements for pension funds. The guidelines of the Financial Assessment Framework (FTK) require a pension fund to assess its investments (and therefore also their risks) in relation to its obligations. For example, for a payment obligation that lies far in the future, you can take more investment risk now than for a payment you will be making next month. 

Wuijster: "As a result of the FTK, it is customary for a pension fund to hedge about 50 percent of the interest rate sensitivity. And that has been an unexpected factor that has seriously contributed to the investment returns of Dutch pension funds over the past 10-15 years".


In “Pension Markets In Focus 2020”, the OECD provides a global overview of the accumulated pension capital of the 37 member states and describes the most important developments. The most important financial indicators are listed, such as the total accrued pension assets, what these assets are invested in, and the returns achieved.

Volgende publicatie:
APG starts investing in Chinese shares

APG starts investing in Chinese shares

Published on: 19 December 2017

APG starts investing in Chinese equities for pension fund clients and their participants. The first 250 million investment will be realized in the very near future.


E Fund

The investments are being made in collaboration with E Fund, one of the largest investors in China. APG and E Fund exchange knowledge relating to asset management, ICT, and pension administration. The partnership with E Fund fits in with the strategy of APG and its pension fund clients to invest explicitly in sustainability and growth markets. APG expects to realize higher returns on long-term investments for its participants.

When selecting companies, APG and E Fund review both the risk–return profile and the sustainability criteria. APG makes direct investment without intervention of external parties, which keeps the cost of investing in Chinese equities relatively low.


Attractive investment opportunities

Gerard van Olphen, CEO of APG Group: “Smart and sustainable investment is a basis for a good pension for the participants of the pension funds. The Chinese economy is growing at a very fast rate, offering very attractive investment opportunities. The partnership with E Fund brings benefits to both parties. As a sustainable pension investor, APG brings in extensive ESG (environmental, social, governance) knowledge and experience. As a major Chinese investor, E Fund contributes extensive knowledge of the local market. APG aims to share its knowledge with other institutional investors in the future.”

Volgende publicatie:
APG and E Fund start Chinese equity fund

APG and E Fund start Chinese equity fund

Published on: 20 September 2017

APG and the major Chinese asset manager E Fund are launching an ESG fund that invests in Chinese equities. According to the promoters, this is the first of its kind.


"The collaboration with E Fund as a strong local partner makes it possible to invest in Chinese A shares and to apply ESG criteria," said Harmen Geers, spokesperson for APG. "The fund provides access to stock markets in mainland China. It invests in a limited number of companies. "


Currently APG does not invest in these shares. APG invests in Chinese companies through the Hong Kong stock exchange where many large Chinese companies are listed. APG customers initially pledged € 250 million. These pension funds view it as emerging market equities. APG expects the fund to grow even further in the coming years. A team consisting of investors from APG and E Fund is in charge of the new fund. When selecting companies, this team examines both the risk-return profile and the ESG criteria.


In a statement, Ronald Wuijster, cio ad interim of APG, states that the asset manager likes to act as a responsible long-term investor for his clients. "Our responsible investment approach combined with local knowledge offers unique investment opportunities in China." Wuijster expects the trend to invest more in China to continue and wants to share the knowledge gained with other institutional investors.