Interview Yvette Hennen and Leon Verboon

double interview

Technology, interest rate cuts and geopolitical tensions defined the financial markets in 2024. Leon Verboon and Yvette Hennen of Shell Pensioenbureau Nederland reflect on a volatile investment year in which SNPS performed strongly.

Key financial market developments in 2024
Yvette: “Global economic growth was mixed in 2024. The U.S. economy expanded by 2.7%, clearly outperforming Europe, which saw growth limited to 0.9%. As inflation declined, central banks had room to cut interest rates. The European Central Bank did so several times, boosting optimism in the markets. But inflation and interest rates weren’t the only forces at play. Geopolitical events also shaped the year. The war in Ukraine and tensions in the Middle East continued to dominate headlines. Meanwhile, far-right political parties gained ground in several European countries and in the U.S. The re-election of Donald Trump had a positive effect on the stock market. His political agenda — especially plans to reduce regulation — was generally well received by investors. Then there’s technology: the ongoing positive sentiment around AI drove significant share price gains. The so-called ‘Magnificent Seven’ — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — saw strong collective growth and helped push equity markets upward. The return on equities in developed markets came in at just over 26% (measured in EUR unhedged). In short, 2024 was a dynamic year, full of opportunities and market movement — but also uncertainty. And that uncertainty became more visible in the first months of 2025.”

How did this impact SNPS investments?
Leon: “Almost all SNPS Life Cycle and portfolios CVP ended 2024 with positive returns. In every case, portfolio performance was in line with or better than the benchmark. The strongest performer was the Life Cycle portfolio Return, delivering a return of 15.5%. The main contributor was developed market equities. Emerging market equities also performed particularly well in relative terms, returning 22% — more than 7% above the benchmark.

The other Life Cycle portfolios benefited from falling inflation, interest rates and credit spreads. For example, the Life Cycle portfolio Interest achieved a return of 3.5%. The Life Cycle portfolio Matching did not deliver a positive return. This was mainly due to increased pressure on France’s credit rating, which led to a sharp rise in risk premiums on French government bonds and a significant decline in bond prices.”

Impact of the Future Pensions Act on investment strategy
Yvette: “The Future Pensions Act required a lot of preparation at SNPS, but our overall investment approach stayed largely the same. Last year, we reviewed whether the payout phase could be improved. The analysis showed that increasing the share of ‘return seeking assets’ from 40% to 50% would improve participants’ purchasing power over time, with only limited extra fluctuation in annual pension increases.”

We’re also continuing to expand our infrastructure investments (with a target allocation of 10% within the Life Cycle portfolio Return). In 2024, we made our first investments in infrastructure funds. Now that the fund’s assets have grown, we’ll be adding an extra investment fund in 2025 to ensure broader regional diversification and more flexibility for the future.”

Developments in ESG
Leon: “SNPS has its own ESG policy, with a focus on climate, governance and responsible investing. We actively vote at shareholder meetings, engage with companies, and exclude those that are serious norm violators or have a significant negative impact. In the developed markets equity portfolio, we aim for a 15% reduction in CO₂ emissions and an ESG Governance-score that is at least equal to the benchmark. The ESG Governance-score is part of the broader ESG score and reflects how well a company is managed and controlled. The ESG policy is well established and appropriate for the scale of SNPS. At present, there is no need for further adjustments — but in the coming years, we will evaluate the policy and consider possible developments.”