Review of the 2021 investment year

The year 2021 is behind us: the year that we both started and ended in a lockdown. Because unfortunately, COVID-19 is still with us. Despite this, it was another good investment year – thank goodness for that! Because we could do with some positivity. In this blog we will provide you with a brief overview of what happened to the stock market last year and hence to your pension capital.

The year of the economy reopening
The global reopening of the economy in 2021 made for a good investment year with good investment returns. But we did see clear differences between the different asset classes.

Positive returns on equities
Developed market equities performed well. Increasing demand meant we saw good returns here. In some places demand was much greater than supply. This was good for share prices, but also led to high inflation. Emerging market equities fared less well, which was largely due to developments in China. Strict rules were imposed on tech companies, and the financial problems of Chinese real estate giant Evergrande and the associated fear of a tsunami of financial problems had a negative effect on returns.

Difficult year for bonds
Bonds struggled in 2021. Central bank policies and rising inflation pushed up interest rates. This resulted in negative yields on government bonds at the end of the year. The rise in US interest rates and ongoing uncertainty about COVID-19 also resulted in negative returns on emerging market government bonds. Corporate bonds showed a flat line, while high-yield bonds did eventually show a positive return.

Tip: Want to know what the returns in 2021 have meant specifically for the lifecycle in which your pension capital is invested? Then read this blog.

A good investment year
All in all, 2021 – like 2020 – will go down in the records as a good investment year. But we don’t yet know what the future will bring for the stock market. A new variant of the COVID-19 virus could cause further uncertainty, as we saw with the Delta and Omicron variants.

Fluctuations continue
When you invest, you always run the risk of negative returns, especially after years of high returns. It is important to bear in mind that we invest for pension accrual and therefore for the long term. BeFrank’s investment principles have been designed for both good and bad times.

Constant insight into investment returns
Did you know that at BeFrank you can keep track of your investment returns 24/7? It’s easy with our app and on your personal pension page. Handy!

Good to know
At BeFrank, we invest your pension capital on a diversified basis. We invest throughout the world in numerous companies, sectors and investment categories such as equities and bonds. This diversification limits your risk. We automatically reduce the risk associated with your pension capital investments as you get older. We then put your money in less risky investments that will be less affected by sudden price drops.

Check your investment risk
At BeFrank, you decide how much risk you are willing to take with your pension investments and how we invest your pension capital. The choice is up to you. Use our Profile Selector to easily determine which investment risk suits you. Take the test today.

We have compiled this information for you with great care, you cannot derive any rights from it.