Keva, the Finnish local government pensions institution, increased its investment return in the first half of the year to nearly 5%, but said the period had been marked by market concerns about economic growth and geo-political disturbances.

By comparison, private sector earnings-related pension provider Veritas reported a 4.6% return on investments in the six-month period, with equities the best-performing asset class, but warned that low interest rates could eat into future investment returns.

Keva’s January-to-June investment return of 4.8% was up from the 2.3% reaped in the same period last year. The fund saw investment income of €1.8bn, more than double the €802m from the six months to June 2013.

Jukka Männistö, Keva’s chief executive, described the first half results as good, even though he said the capital markets had been weighed down with worries about economic growth and the many troubles in different parts of the world.

Among individual asset classes, listed shares and equity funds returned 6.2% in the first half, fixed income returned 3.6%, real estate investments produced 2.6% and smaller asset classes including private equity investments yielded 9.5%, Keva said.

Hedge funds generated 4.8% and commodity investments produced 9.6%, it said. 

Keva’s asset allocation was weighted towards fixed income, with this class making up 43.3% of all investments, while quoted equities accounted for 39% of the total.

Real estate made up 5.5%, hedge funds 4.8% and commodity investments 0.5%.

Chief investment officer Ari Huotari, warned that concerns which dogged the markets in the first half were here to stay for the rest of the year.

“News of economic growth in Europe and especially in the euro area was very modest,” he said.

While news from the US appeared more positive generally, there were disappointments even there, he said.

“And early in the year, the market proved surprisingly resilient to problems in Russia and Ukraine, the Middle East and the Ebola news from Africa,” Huotari said.

Keva’s total assets under management grew to €39.9bn at the end of June from €35.3bn at the same point the year before.

Contributions rose to €2.6bn in the first half, up from €2.5bn.

Meanwhile at Veritas, equity investments returned 6.7% — more than any other asset class — up from 3.9% in the first six months of 2013, according to the pension insurance company’s half-year figures.

Bonds generated a 4.2% return — up sharply from the 0.8% loss suffered in the same period last year — while direct property investments produced 3.1%, little changed from the 3.2% year-earlier return.

Veritas’ investment director Niina Bergring said the pensions insurer was pleased with the first-half result and said it proved the low-risk investment strategy had been right.

“Interest rates have fallen and by more than expected, which has led to a particularly good return of 4.2% on our bond investments,” she said.

However, the lower rates were eating up the potential returns on bond investments in the future, and were a problem for all long-term investments, Bergring said.

The solvency ratio stood at 30.2% at the end of June, Veritas said, up from 27.5% 12 months earlier.