Finnish earnings-related pension provider Varma returned 5.9 per cent in the first half of 2024, its interim results reveal.

Publishing its half-year results, the pension provider said its assets stood at €62.1bn at the end of June, up from €59.1bn at the start of 2024.

Varma's solvency ratio was 133 per cent, rising from 130.4 per cent at the start of the year and its solvency capital was at a safe level of 1.7 times (1.6 times at the beginning of the year) the solvency limit.

Its positive investment result in the first half was driven by favourable stock market performance that continued throughout the first half of the year.

Varma CEO, Risto Murto, commented: “Varma's good return of 5.9 per cent in the first half of the year is due to the continued strong performance of international stock markets. Global economic growth has remained steady, but growth in industry-led Northern Europe was sluggish in the first part of the year.”

Among Varma's investments, the strongest performer was listed equities, which returned 11.2 per cent. Fixed income investments returned 1.6 per cent, real estate investments -2.4 per cent and hedge funds 6.1 per cent. Among Varma's quoted equity investments, US equities were the best performers with 17.2 per cent.

“The big US technology companies have been largely responsible for earnings growth and share price rises. However, the pull of technology companies will eventually fade, and interest rates in the US are also now falling. Market nervousness about the sustainability of growth driven by a few sectors has increased over the summer. Significant falls in interest rates may not be seen quickly unless the cooling of the labour market turns into a clear rise in unemployment,” Varma head of investments, Markus Aho, said.

The first half of the year also saw Varma invest €1.5bn in a US-based exchange-traded fund (ETF) that takes into account climate impacts, which supports Varma’s environmental policy. The fund, tailored for Varma, invests in global companies with a track record of reducing greenhouse gas and carbon emissions.

Furthermore, Varma attended 527 general meetings in the first half of the year. Of these, 97 were meetings of Finnish companies and 430 of foreign companies. Varma also joined two new international investor initiatives during the period.

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