Denmark’s Sampension reported today that strong market development since news of COVID-19 vaccine successes had propelled typical market-rate pension returns to 4.17% for the year to date – up from deep losses early this year.
The example given was for a 50-year-old saver with moderate risk, whose plan had registered a 15.3% loss in the first quarter of the year.
The labour-market pension provider said November’s slight recovery in both cyclical and value stocks had had a positive effect on Sampension’s performance and relative returns.
Henrik Olejasz Larsen, Sampension CIO, said: “At the same time we have benefited from high returns on private equity and Danish shares, for example.”
Similar but slightly lower gains could be seen in credit markets, he said.
The firm reported that all customers below the age of 50, with high-risk investment profiles, had made returns of 9.14% on their pension savings in November alone. For the year up to this point, this group of customers were now seeing a 4.79% return on their pensions, the firm said.
Olejasz Larsen said Sampension had stuck with its investment strategy despite this year’s ups and downs on markets, and it was now starting to see the results.
“We are pleased customer returns are in the sizeable plus zone, and hope the development continues,” he said, adding that December looked promising.
Customers with average-rate products had felt less impact from the equity market fluctuations seen in the spring, Sampension said, with almost 70% of this portfolio consisting of government and mortgage bonds.
Average-rate pensions currently have a year-to-date return of 6%, up from a first quarter loss of 0.9%, the provider said.