Statistical news focuses on the latest figures and trends in Danmarks Nationalbank’s statistics. Statistical news is targeted at people who want quick insight into current financial data.
Insurance companies and pension funds hedge more against dollar decline
Danish insurance companies and pension funds have increased their currency hedging of investments in US dollars from 61.8 per cent to 73.5 per cent since the beginning of the year. This represents a significant increase, which reflects that the companies have entered into more financial contracts to protect their investments against declines in the dollar. A hedging percentage of 73.5 percent means that almost three-quarters of the investments in dollars are now secured against fluctuations in the dollar exchange rate. The hedge against exchange rate changes in the dollar can have a significant impact on the overall return of their investments. By the end of May 2025, the total investments of the insurance companies and pension funds in dollars amounted to approximately kr. 1.431 billion – or 30 percent of their investments.
Dollar hedging has increased significantly in a short period of time in 2025
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Insurance and pension companies' dollar hedging since 2023. Find data here: link
Dollar hedging has reduced the loss in 2025
The total return on the insurance companies and pension funds' investments results in a loss of kr. 4 billion year to date. The return from dividends and interest has been kr. 47 billion in the first five months of the year. At the same time, there have been negative exchange rate adjustments of kr. 4 billion, and currency adjustments have further reduced the return by kr. 47 billion. The majority of the currency loss this year is due to the fact that the dollar exchange rate has fallen significantly since the beginning of March, and approximately a quarter of the investments in dollars are not currency-hedged. Thus, the currency hedging of insurance companies and pension funds has reduced the loss by about kr. 80 billion this year. The currency loss would have been kr. 127 billion without hedging, and the total loss kr. 84 billion.
Without currency hedging, the loss would be kr. 84 billion
Note:
Insurance companies and pension funds' investment returns in 2025. Investments in Danish investment funds are looked-through. Find data here: link