Swedish occupational pension provider Alecta returned -2.4% on its defined contribution (DC) product, Alecta Optimal Pension, for the first quarter, compared with 11.1% for the same period in 2015.
While the company refers to the “turbulent” period in stock markets from January to March, it said the return was slightly better than that of the benchmark index, the Morningstar SEK Aggressive Balanced Fund.
At 31 March, the DC product had 61.3% in equities, 30.1% in fixed income and 8.5% in property.
However, the defined benefit (DB) portfolio fared better, returning 0.9%, although this was also a large fall from the 7.8% return for the same period last year.
Just over half of the portfolio (52%) was invested in fixed income at 31 March, with 40% in equities and 8% in property.
Magnus Billing, chief executive at Alecta, said: “Returns for both Alecta Optimal Pension and defined benefit insurance were negatively affected by sharply falling share prices.
“Nevertheless, Alecta is well equipped for the more challenging profit environment of the future because of its stable finances.
“Our low management costs have helped our success in offering good pensions, and our cost efficiency continued to improve, compared with the corresponding period last year.”
In the five years to the end of March, Alecta Optimal Pension’s average annual return was 9.1% per year, 3.8 percentage points more per year than the benchmark index for the same period.
For the DB product, the average annual return has been 7.2% over the same five years.
However, Alecta’s solvency ratio fell by 11 percentage points to 160% over the first quarter of 2016, but this is still strong, said the company.