Denmark’s largest commercial pension provider, PFA, reported an increase in its total year-to-date investment return at the end of the third quarter, and its chief investment officer said that despite pressure on markets right now, the firm still expected to accumulate more in returns by end the of 2021.

The DKK730bn (€98bn) mutual pensions firm said its total return in the nine months to the end of September was DKK16.0bn. This is up from the DKK13.4bn it reported at the half-year stage.

Customer returns for PFA’s standard product, PFA Plus, for the nine months ranged from 0.9% to 11.8%, depending on risk profile and years to pension age.

However, returns on its new PFA Climate Plus product – which has more of an emphasis on climate-friendly investments – were slightly higher than that, with a range of 0.9% to 12.7%, according to the interim figures published today.

PFA said in its commentary that the upswing on financial markets, and the positive developments that were otherwise characterising 2021 had changed in September.

“Signs of overheating economies in several countries, the halting of central banks’ massive stimulus measures, increasing commodity prices and higher inflation have taken some of the steam out of the strong growth in equity markets that otherwise characterised the year,” the Danish firm said.

But PFA Group CIO Kasper Ahrndt Lorenzen said that despite this: “We still believe there is room for additional returns in the fourth quarter once things begin calming down again, and the pension savings may increase even further before the end of the year.

“However, at the same time we are also very aware that we are now moving into a new phase where the financial markets will be under greater pressure, and this may also result in additional volatility,” he said.

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