SWEDEN – Occupational pensions firm Alecta said it made a total return of 8.3% in the first half of the year, compared to 4.9% a year before.

Its portfolio has risen to SEK375bn (€40.1bn) as at the end of June, with a collective funding ratio of 129%.

Sixty-one percent of its portfolio is in fixed income, with equities accounting for 33%.

Alecta had been cautious about full-year returns at the time of the first-half returns announcement in April. President Tomas Nicolin said at the time: “I believe there is reason for caution as regards total return expectations for the rest of the year.”

He cited low interest rates and the strong performance of equities and real estate, which he said limited return potential.

Alecta said today that its first-half return was 1.2 percentage points better than the average for Swedish life insurance companies.

"It is we here at Alecta who can influence returns and expenses,” said Nicolin. “That is why it is gratifying that when we went through last year's annual reports we could see that we have lower costs and higher returns than the rest of the industry.

“This means that employers get more for their money if they pay premiums to Alecta rather than to other insurance providers."

Alecta handles the major part of the ITP occupational pension plan on assignment from the Confederation of Swedish Enterprise and the Federation of Salaried Employees in Industry and Services.

It services 27,000 client companies and 1.6m insured individuals.