AMWatch

ATP pleased with its interest hedging: Not following experts' advice in 2014 was the right decision

In today's environment of dropping interest rates, ATP Chief Executive Officer Bo Foged is pleased with the pension fund's decision to continue its interest hedging strategy, which became the center of attention five years ago when particularly CBS Finance Professor raised a critical voice.

ATP Chief Executive Officer Bo Foged. | Photo: PR/ATP

The most important task of Denmark's largest pension fund ATP is to ensure Danish savers an annual supplement to their state pension. 

To ensure ability to deliver on its promise, ATP has a so-called hedging portfolio, which has been installed to ensure that the 5.2m Danish savers that are members of ATP receive what they have been promised, regardless of interest rate fluctuations. The value of ATP's guarantees increases when interest rates drop.

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