ABP invests against what it owes, not against an index
ABP, the largest pension fund in the Netherlands at €568 billion, is judged less on its return than on its funding ratio: assets measured against the pensions it has promised. That ratio hit 130% in August 2026. The cost of running a portfolio that way is visible in the numbers. In 2025 its interest-rate and inflation hedge cost 4.0%, about €21.7 billion, and the fund finished the year down 1.6%.
Key numbers, and what they mean
130.2%
Its funding ratio in August 2026: €1.30 of assets for every €1 of pension promised, up sharply from 111.7% at the end of 2024. This is the number Dutch funds are actually judged on.
-4.0%
What its interest-rate and inflation hedge cost in 2025, about €21.7 billion. It was the single largest drag on that year's return, and it is the price of protecting the funding ratio.
-1.6%
The 2025 return, a €8.5 billion loss, even as equities rose. The first half of 2026 rebounded to +6.6%.
1 Jan 2027
When ABP converts to the new Dutch pension system. Each member's share will be set by the funding ratio on 31 December 2026.
Asset mix, June 2026
Fixed income39%
Equities32%
Alternatives16%
Real estate9%
Hedging overlay4%
The read-through
From the report
Takeaway: how to apply it to a portfolio
ABP is measured on assets against the pensions it owes, not on beating a market index.
Define what you owe before you decide what to own. A portfolio exists to fund specific future spending, so measure it against that liability rather than against whatever index is running hot.
Hedging its interest-rate and inflation exposure cost 4.0%, roughly €21.7 billion, in 2025, the biggest single drag on the year.
Hedges cost real money in the years you turn out not to need them. Price that cost in advance and decide the protection is worth it, or you will drop the hedge at exactly the wrong moment.
With every member's share fixed by the 31 December 2026 funding ratio, ABP still chose not to hedge its equity risk, saying the cost outweighed the benefit.
A looming deadline is not automatically a reason to de-risk. Weigh what the insurance costs against the real chance of missing your target, then decide on purpose rather than by reflex.
The Argus lensAbout a quarter of ABP's money sits in private equity, infrastructure and real estate, and every one of those marks feeds the funding ratio it is judged on. Whether a private fund's carrying value holds up is the same question you face on any commitment. That is the read we give you.
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About the source
ABP's Q2 2026 quarterly report, published 23 July 2026, covers the half-year to 30 June 2026: €568 billion in assets, the asset mix and returns by class. The funding ratio is from ABP's monthly disclosure (31 August 2026), and the 2025 return and hedging cost from its 2025 annual results.