Danish pension funds now hold more investments in India than in China, a shift driven by stronger returns on Indian assets, analysis by Insurance and Pension Denmark (I&P Denmark) has revealed.

The report highlighted that Indian pension holdings have ballooned in value over recent years, most recently reaching DKK 22.8bn, up from DKK 17.4bn at the end of 2023.

In contrast, Chinese holdings have flatlined, standing at DKK 16.7bn this year.

According to I&P Denmark managing director, Kent Damsgaard, this reflects India’s superior economic growth over the past three years relative to China.

“It is interesting that the pension industry now clearly has more investments in India than in China,” said Damsgaard.

“This is not only due to new investments, but primarily because the value of Indian holdings has simply risen more, because they have delivered higher returns,” he added.

Despite India’s gains, the US remains the dominant outside-Denmark destination for pension capital.

Indeed, I&P Denmark noted that pension investments in the US are roughly 75 times larger than those in China, accounting for 25 per cent of all foreign pension assets, even though the US capital market is only about five times larger than China’s.

Damsgaard explained the logic driving continued US dominance.

“Even though China’s economy is large, the US capital market is far more mature and deep, giving pension funds security and better prospects for stable returns.”

He added that Danish savers remain somewhat cautious about investing in more remote or less transparent markets, underlining that, while India and China are economic powerhouses, investing there can involve “many dilemmas”, especially in markets where state involvement is significant.

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