Finnish earnings-related pension provider Varma avoided a negative investment return in the first quarter of 2025, as it said European equities compensated against the losses from US equities.

As a result, the market value of its investments remained at €64bn after the first quarter, and its investment return was 0 per cent for the period.

Varma CEO, Risto Murto, said: “Investment markets have been volatile in the first half of the year. Unusually, during the first quarter of the year, European equity markets outperformed US markets. This compensated for Varma's early-year returns.”

He continued: “The Finnish economy has been showing signs of a budding recovery. It would be very unfortunate if the trade war were to interrupt the recovery. Over the past five years or so, the Finnish economy has faced an exceptional amount of headwinds from the international economic environment.”

Among Varma's investments, equity investments returned -1 (5.3) per cent. However, the return on Finnish equity investments was 7 per cent in January-March. Hedge funds returned 1.4 per cent (3.9), fixed income 1 per cent (1) and private equity -0.8 per cent (3). Real estate investments returned 0.8 per cent (-0.7).

Varma head of investments, Markus Aho, added: “In the US, equities were already well down from their peak in March. With President Trump's tariff speeches, the risk of a recession in the US has risen significantly. Germany's decision early in the year on a massive investment package was psychologically significant for Europe and raised optimism about a pick-up in growth. But now markets around the world are nervous about the tariffs and their impact.”

So far, the market downturn has not significantly weakened Varma's solvency. At the end of March, Varma's solvency ratio was 134 per cent (134.6 per cent at the beginning of the year), and solvency capital was €16.5bn(€16.8bn at the beginning of the year).

“Varma has been well positioned to face the crisis in the market thanks to our near-record solvency. From a risk management perspective, the situation is no different, despite the rapid fall in share prices as the spring progressed," Aho said.

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