Denmark’s Industriens Pension made a 2.7% return on investments between January and June before pensions tax, after the result was boosted by strong returns on corporate and government bonds, according to its interim report.

In absolute terms, the investment return was DKK3.6bn (€483m) in the period, less than half of the DKK7.4bn the pension fund produced in the first half of 2015, when the percentage return was 5.8%.

Laila Mortensen, chief executive of the pension fund for industrial sector workers said: “There has been a lot of turbulence on the financial markets in the first half of the year, which has favoured investments with lower levels of risk.”

Equities in particular had a difficult time at the beginning of the year, though this  improved in the second quarter, she said.

“This reinforces the importance of diversifying investments and having a robust, long-term investment strategy,” Mortensen said. 

Corporate bonds, which made up 32.7% of the portfolio at the end of June, were the strongest performing asset class for Industriens Pension in the first half, returning 7.2%, followed by government bonds which returned 4.4% and accounted for 21.5% of investment assets.

Equities made losses, with foreign shares ending the half year down 2.0% and Danish shares making a 0.4% loss.

Foreign shares make up 28.2% of the portfolio while Danish shares have an 11.0% allocation.

Industriens Pension said employment in the industrial sector in Denmark was growing well, and that this had become evident in the fund’s figures in the first half.

The number of members paying into the fund via employers rose by 3,000 in the twelve months to the end of June to reach 165,000, while total contributions grew to DKK4.2bn in January to June, up DKK52m from the same period last year.

The pension fund’s total investments rose to just over DKK142bn at the end of June from DKK136bn at the same point last year.