Denmark’s Danica Pension has reported returns of between 5.2% and 12.2% for customers with its market-rate product for 2020 as a whole, saying its active management and overweighting of Danish shares were factors behind the success in an “extraordinary year”.

Poul Kobberup, Danica Pension’s CIO, said: “Precisely in such an extraordinary year, where the waves are very high, it is important to be true to your strategy.”

He said the DKK450bn (€60.5bn) pension fund’s current investment strategy was introduced in early 2016, focussing on, among other things, bringing asset management in house and increasing alternative investments.

Danica Pension, a subsidiary of Danske Bank, said its market-rate Danica Balance pension product had produced a 12.2% return for customers with a high-risk profile and 30 years until pension age, while people with medium risk and 20 years to go saw a 9.5% return in 2020.

Customers with five years left before pension age and a low investment risk profile made a return of 5.2% in 2020, the provider reported.

It its announcement, Danica Pension compared the full-year returns to the 20% loss customers’ pension accounts had been registering at one point in March during the market crash as the COVID-19 pandemic intensified.

“As a pension company, we have employed particularly active portfolio management, and in combination with dynamic risk management, it has produced good results for our customers,” Kobberup said, adding that 2020 had been one of the most extraordinary years of his 30 years as an investment professional.

“Danish shares, together with technology shares, have been the best-performing assets in 2020, and here Danica’s customers were rewarded by the fact that we have been very active in our ongoing stock selection and have had an overweight position in Danish shares,” he said.

The pension provider said it expected 2021 to result in positive returns to customers, despite current coronavirus restrictions: “It is our expectation that an economic recovery will pick up speed during 2021, strongly supported by coronavirus vaccines, which are being rolled out around the world right now,” said Kobberup.

But he warned that times continued to be very uncertain, and that the coronavirus still had the potential to create “a really sour mood” in the financial markets.

If restrictions were tightened or extended, Kobberup said the economic recovery risked “getting stuck.”

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