ICELAND - Net pension fund assets at the end of April increased by ISK16bn (€102m) over the month, following increases in both equity and fixed income investments.

Latest figures from the Central Bank of Iceland showed pension fund assets, based on a sample of the largest pension funds, increased 0.9% to ISK1.9trn (€11.9bn), with ISK1.1trn invested in fixed income assets, and ISK657.8bn invested in variable income securities such as mutual funds and equity funds.

The monthly update revealed investments in Housing Finance Funds (HFF) bonds continued to make up the largest investment in the fixed income portfolio, increasing from ISK392bn in March to ISK401.1bn a month later, a 2.3% increase.

However, the figures did not take in to account the announcement at the end of May that 26 pension funds had agreed to purchase HFF bonds valued at ISK90.2bn from the Icelandic Treasury in an attempt to improve liquidity in the economy. (See earlier IPE article: Icelandic pension funds aid liquidity through bond purchase)

Meanwhile, the monthly statistics showed in April equity investments by pension funds had increased slightly to ISK123.5bn.

However, the majority of this ISK92.1bn was invested in foreign equities.

Over the year to April 2010, the figures showed the value of the pension fund assets increased by 15%, or ISK244.6bn, although the Central Bank noted there was still some uncertainty regarding the final value of the pension fund assets.