Valtion Eläkerahasto posts strong returns on back of stocks
FINLAND - Valtion Eläkerahasto (VER), the Finnish state pension fund, has seen its Nordic equity portfolio return more than 30%, according to preliminary figures for 2010.
The scheme, which invests almost all of its €13.9bn portfolio in equity and bonds, returned 11.7% - the second consecutive year it grew by more than 10%.
Timo Löyttyniemi, managing director at VER, further noted that it managed to outperform benchmark indices for both equity and bonds for the third year running.
The scheme also saw its holdings outside of those two portfolios rebound strongly from a loss of almost 15% in 2009 to an 8.6% return in 2010.
Löyttyniemi remained unsure about exposing VER, which aims to finance the state's future pension liabilities, to the unstable euro-zone market.
"At the end of the year, VER had no government bonds in Greece, Ireland, Portugal or Spain," he said.
"The problems with many European countries and the low interest rates will create a challenging investment environment for this year."
Risto Murto, chief investment officer at Finland's largest pension scheme Varma, recently said it was avoiding euro-zone bond exposure for similar reasons.
Meanwhile, the €2.1bn Veritas Pension Insurance announced similar growth of 11.4% due to strong performance from both its equity investments, as well as its real estate portfolio, which returned 7.4%.
Bond investments came third, growing by 6.1%, while its equity portfolio grew by 23.7%, with 13-year aggregate returns reaching 6.4%.
Additionally, Veritas said it had seen a 6 percentage point increase in its solvency ratio, which now exceeds 27%.