Finland’s Etera has seen assets under management dip to their lowest level in nearly two years after the pensions mutual admitted to “disappointing” returns of just 0.3% from investments, down from nearly 10% in 2012.

According to preliminary results, Etera’s equity and fixed income returns were “weak”, although it did not disclose how the two asset classes fared.

Chief executive Hannu Tarkkonen said its investment strategy did not work in 2013 and blamed the investment climate.

Jari Puhakka, the provider’s CIO, noted that equities were the dominant force for growth in 2013.

But because there were no strong market movements over the course of the year – unlike volatility seen in past years – no opportunity presented itself for Etera to add value by investing tactically, he said.

Puhakka added that, as a result of the weak overall return, Etera amended its investment strategy and would now place greater emphasis on the optimisation of its strategic asset allocation rather than relying on tactical investments.

Assets under management at Etera fell to €5.51bn at the end of 2013, down from €5.7bn in December the year prior and the lowest level since March 2012.

Correspondingly, the provider’s solvency ratio continued its year-long decline from 21.3% to 15.2%, the lowest level since September 2011 – after it announced nine-month investment returns of -5.2%.

Etera’s results are behind other mutuals, including Veritas Pension Insurance, which returned 7.4% on investments in 2013, aided largely by a 18.3% return on its equity holdings.

Although the insurer’s head of investments Niina Bergring noted that fixed income holdings returned a more “moderate” 1.5%, real estate investments grew by nearly 6%.

Veritas saw its solvency ratio increase by nearly 4 percentage points year on year to 27.8%, and said it had achieved a real return of 5.1% over the past five years.