Dutch courage or cavalier: pensions take on risk, exit bonds

A major overhaul of the Dutch pension system is poised to shake up European bond markets, with traders preparing for especially heightened volatility in the total ownership of Dutch-issued debt. The Dutch central bank has cautioned that the intricate mechanics of the reform could pose risks to financial stability, while asset managers are urging restraint, particularly at the long end of the yield curve.
Starting January 1, many Dutch pension funds will adopt life cycle investing, shifting allocations toward riskier assets and away from bonds.

TraditionData’s analysis has found that this upcoming transition is already driving yields higher on longer-maturity bonds.

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Dutch courage or cavalier pensions take on risk, exit bonds

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