Reserve management

Strict requirements

Our own investments total EUR 8.5 billion, excluding the value of our gold. We have put together our investment portfolios on the basis of strict requirements, aiming for the best possible risk-return profile. We closely monitor their credit quality and liquidity, but we also attach great value to sustainability. Our sustainable investment policy is based on Environmental, Social and Governance criteria (ESG). By considering these three factors in our investment decisions we want to help make the economy more sustainable.

Find out more about our sustainable investment policy and read our Responsible Investment Charter

Our profit goes to our shareholder: the Dutch State

Profit is not a goal in itself but a consequence of monetary policy and of our own investments. We pay out all or part of the returns on our investments to the Dutch State – our sole shareholder. Since the introduction of the euro in 1999, we have made a total profit of €22.6 billion. Of this amount, we paid out €16.2 billion in the form of dividends to the Dutch State, using the remaining €6.3 billion to strengthen our capital base. This helps us bear the risks associated with the implementation of the European Central Bank's (ECB) monetary policy.

Managing our investments

We have a range of investments, but we must always consider our role as a supervisory authority and central bank. To avoid any semblance of conflicting interests or insider knowledge, we have outsourced the management of some of our investment portfolios. We cannot invest in certain bonds for the portfolios that we manage ourselves.

Bonds

Our self-managed portfolio comprises mainly government bonds and bonds issued by supranational institutions and semi-government bodies. Their joint value is around €4.6 billion. Previously, we purchased both euro and US dollar bonds, But we decided to eliminate our euro portfolio due to the current interest rate environment in the euro area. This means our bond portfolio predominantly consists of US dollar bonds. They are short-term bonds, and we hedge foreign exchange risk.

Requests for US dollars from IMF or ECB

This dollar portfolio allows us to meet any foreign exchange needs of the European Central Bank (ECB) and the International Monetary Fund (IMF). The IMF can ask us to provide US dollars to fund its loans. Also, the ECB may request us to provide US dollars for the execution of currency interventions. In order to be able to meet such requests quickly and efficiently, our dollar portfolio must be sufficiently liquid.

Equities and corporate bonds

Our investments in equities and corporate bonds total €3.9 billion: €2.7 billion in equities and €1.2 billion in corporate bonds. We have outsourced their management to external asset managers. The investments in corporate bonds include what are known as investment grade and high-yield corporate bonds. In addition to spreading the risks across the total investment portfolio, these investments also offer more possibilities for putting our responsible investment policy into practice.

Gold

Traditionally, central banks held a gold stock to meet the gold standard. Coins and banknotes could be exchanged for gold on the basis of this standard. But since this standard was abandoned our gold stock serves as a reserve and as an anchor of trust. Our gold is kept in various locations in the world. Part of it is in our own vaults, and the other parts are in the United States, Canada and the United Kingdom.

Japanese yen investments

In addition to our own reserves, we also manage part of the ECB's Japanese yen reserves. Every three years, the national central banks in the euro area can choose which currency they wish to manage. We chose the Japanese yen, because this would not create any conflicts of interest with the other financial assets and foreign currency reserves we manage.

European Reserve Management Services

DNB is one of the national central banks in the euro area countries which provide services for the management of euro reserves of national central banks outside the euro area. These are known as Eurosystem Reserve Management Services (ERMS).