Pension funds in Denmark are publishing early reports of unusually high 2019 investment returns on the back of strong markets all round, while dampening expectations that last year’s success can be repeated in 2020.

Labour-market pension fund PensionDanmark reported a 15.7% pre-tax return for scheme members with 15 years to retirement and a medium-risk investment profile in 2019, and the fund for academics, MP Pension, said its DKK16.4bn investment return for last year equated to a return of 15%.

Meanwhile, Danica Pension – the country’s second biggest commercial pension fund – announced customers with low-risk profiles and five years to retirement received a 9.9% return for last year, while those with high-risk profiles and 30 years to retirement made a 25.5% gain.

Torben Möger Pedersen, chief executive officer of PensionDanmark, said the 2019 return was equivalent to about three to four years of normal return in one year.

“However, it is our clear expectation that the Danes will get used to more moderate returns in the next few years,” he said.

PensionDanmark said it had been continuously adjusting its investment strategy in line with falling interest rates, and had increased its investment in renewable energy infrastructure, property and other assets.

Anders Schelde, CIO of MP Pension, said his pension fund’s high return had been particularly driven by a very strong stock market, which had produced a 30% return alone in 2019.

“But pretty much all of our investments had tailwinds,” he said, adding that even real estate, which was the poorest-performing asset class, ended the year with a 9% gain.

With the US election due in 2020, geopolitical turmoil and a looming conflict in the Middle East, Schelde said it was very difficult to predict what would happen this year.

“It is our clear expectation that the Danes will get used to more moderate returns in the next few years”

Torben Möger Pedersen, chief executive officer of PensionDanmark

“However, we are still confident and are aiming for a return in positive territory in 2020, but the risk of more extreme outcomes in both directions has increased,” he said.

Between 2009 and 2019, MP Pension said it produced an average annual return of 9%.

At Danica Pension, investment director Poul Kobberup said 2019 had gone well for the Danske Bank subsidiary’s customers, partly because of falling interest rates and partly on the back of equity price increases in the period.

“At the same time, we at Danica Pension have stuck to our long-term strategy, and we have invested more of our customers’ pension savings into alternative investments, which for several years have produced good, stable returns – and in green investments,” he said.

Kobberup said the pensions firm, therefore, expected to maintain its long-term strategic approach to the investment mix in 2020.

“On top of a really good year in 2019, however, we will probably see more normal returns in 2020,” he warned.