Ronald Wuijster on investing in a Corona year
Despite the Corona crisis and the associated correction on the stock market, APG can still look back on an ‘excellent investment year’. Ronald Wuijster, member of the Board of Directors and responsible for Asset Management and HR, explains why. “We really had to work hard as an investor and many discussions have been raised. But we didn't make any changes to our long-term investment approach.”
How did APG perform in the field of asset management in 2020?
“Really good. We managed to achieve great returns for our customers, between 6.5 and 10 percent, and we recovered remarkably well in comparison with 2019. The results in the year 2019 were somewhat detrimental to the five years’ return. When we look back: the absolute return -the income realized from the market- was good in 2020, but a little bit lower in 2019. It is then up to Asset Management to earn additional returns above the market average, which is called excess return. We did not succeed in that goal in 2019, as we were below the market average in that year. However, the excess return in 2020 was really very good again and, as a result, the five years’ excess return also increased.”
More room was made in 2020 for investments in the Netherlands. Why was that? And what was that decision based on?
“APG is looking to emphasize its societal role in the Netherlands and contribute to the economy. That's not done by means of random investments. If you choose to invest in, for example government bonds, your contribution to the Dutch economy is rather limited. Moreover, there is sufficient interest in such investments which means it doesn't result in added value. Asset Management has therefore identified two areas in which we do make a contribution: infrastructure and venture capital. And the latter we invest in start-ups focusing on the energy transition, for instance, like our recent investment in NET2GRID. In addition to the social importance, making investments in the Netherlands of course has to meet the characteristics in the field of return on risk. That means we are certainly not investing in the Netherlands at all costs, but when a serious investment comes up that compares well with other market opportunities, it has a clear advantage.”
2020 has been a turbulent year in many ways. What is the overall conclusion as we look back?
“That we were able to maintain the good investment returns in the past year. And that truly makes me proud. We were startled by the stock market correction in the beginning of 2020: due to COVID-19, we experienced a sudden, sharp fall on the stock market. That fall caused commotion and concerns, sometimes with our customers as well. They witnessed the stock markets drop significantly and wondered whether we shouldn't be more careful. But from experience and good analysis we know it's not wise to slow down at a time like that. If you sell at a low level, triggered by fears of risk, you have to buy again at a high level once the stock market is recovered. That would be a shame. So, we maintained our long-term direction and purchased shares, according to our rebalancing policy, while the valuations decreased. In short, this means the following: when certain investment categories sharply increase or decrease, the allocations per category agreed with the customers is jeopardized. That means you have to purchase or sell: rebalancing. A correct decision.”