ABP adopts passive investing
Dutch civil service pension scheme ABP is making a significant shift towards passive investing by moving its liquid assets to index-based strategies. ABP, which was previously known for its active investment approach, announced the changes in its revised ‘investment beliefs’ statement in November last year.
The pension fund cited academic research that highlighted the limited added value of active investing within asset classes and the higher costs associated with it. While active management will continue for illiquid allocations, ABP stated that index-based investing would become the foundation for its liquid portfolio, emphasizing its focus on long-term sustainable returns.
The pension scheme’s asset manager, APG, had already launched an index-based product for another pension fund, Bpf Bouw, in late 2021. ABP’s move towards passive investing follows a global trend, with other major pension funds, including Japan’s Government Pension Investment Fund (GPIF) and Finland’s Ilmarinen, also increasing their passive investment footprints in recent months.