Pensions mutual Elo made 4.9% on investments in the first half of this year with returns from all asset classes in the black.

In its interim report, Elo, which was formed in January 2014 through the merger of Finland’s Pension Fennia and LocalTapiola, said it had cut equity risk between January and June, with the equity allocation falling to 32.2% of risk-adjusted assets from 35.3% at the end of December.

Hanna Hiidenpalo, director and CIO of Elo, said: “During the first half of the year, Elo’s investment income remained at a good level despite the strong movements on the equity and fixed income markets during the second quarter.”

There had been no significant change in the return level at the end of June from that in March, she said.

“Returns were positive for all asset classes during the first half of the year,” Hiidenpalo said.

Equities had been the strongest performing asset class, returning 13.4% compared with 5.4% in the same period last year, led by European equities which returned 13.8% and private equity, which generated 14.6%, up from 7.5%, Elo said.

Hiidenpalo said Elo had moved to trim its equity risk from April.

“Equity market pricing has remained higher than average and there has been no clear change for the better in the current year’s return expectations,” she said.

Elo reported that it had continued diversifying its interest rate risk investments outside the euro area, keeping its interest rate position moderate by underweighting Europe in particular.

It also said it reduced exposure to corporate bonds during the spring.

Because of low interest rates, returns for fixed-income investments came in at 0.2%, down from 2.9% in the same period a year before, Elo said.

Pension assets grew to €20.8bn at the end of June from €19.9bn at the end of December.

Solvency increased to 27.5% of technical provisions at the end of June from 25.8% at the end of December, rising in absolute terms to €4.5bn from €4.1bn.

Premiums written were up slightly year-on-year, at €1.6bn at the end of June from €1.5bn by the same point last year.