Danish pension funds Sampension and Danica have reported strong investment returns in the first quarter of 2019 – in contrast to losses posted for last year.

The DKK290bn (€38.8bn) provider Sampension revealed that market-rate pension products recorded a 7.4% gain in Q1 for a 45-year-old with a medium-risk fund, and 10.1% for the youngest scheme members with high-risk investment profiles.

Sampension reported losses of 3.3% for moderate-risk profiles and 4.9% for high-risk profiles in 2018, with both examples being for scheme members with 20 years to retirement.

The two independent pension funds Sampension manages, which provide conditionally-guaranteed average-rate pensions – AP and PJD – gained 5.4% and 5.5%, respectively, for their customers. This was more than double the funds’ returns for the whole of 2018, the provider said.

Henrik Olejasz Larsen, CIO at Sampension said: “The first quarter of 2019 has been the best quarter in stock markets for 10 years and the best first quarter for more than 20 years. This means that almost two years of normal share returns can be booked in just three months.”

Henrik Olejasz Larsen, Sampension

Henrik Olejasz Larsen, Sampension

Meanwhile, the DKK566bn Danica Pension – a subsidiary of Danske Bank – said its customers’ savings in the market-rate product Danica Balance had gained between 4.7% and 12.7% so far this year, depending on customer profile. This contrasted with the fund’s full-year investment loss of 5.3% in 2018.

Anders Svennesen, CIO at Danica, predicted further global economic growth over the coming months following the US Federal Reserve’s decision not to raise interest rates as quickly as previously expected for fear of hindering the global economic recovery.

He added: “At the same time, there have been signs of progress in the negotiations between the US and China. And finally, the big drop in prices, as we saw last year, seems to be an overreaction to the reasonable prospects for economic growth.

“We therefore expect continued positive economic growth and that we will soon see an end to the commercial war between the US and China.”

Olejasz Larsen, however, said falling interest rates meant an increased risk of declining stock prices in the near future. In anticipation of a market fall, Sampension has reduced its exposure to the stock market after the strong first quarter returns.