Finnish earnings-related pension provider Varma made a return of 7.7 per cent, equivalent to €4.6bn, in the first nine months of 2024, its interim results reveal.

The pension provider said favourable developments on international stock markets have delivered strong returns for pension investors since the beginning of the year. In addition, Varma said a slowdown in inflation and falling interest rates have boosted returns on fixed-income investments.

The value of Varma's investments was €63.2bn at the end of September, compared to €59.1bn at the beginning of the year.

Varma's solvency ratio was 133.6 per cent at the end of September, compared to 130.4 per cent at the beginning of the year. Its solvency capital was at a safe level of 1.7 times the solvency limit, compared to 1.6 times at the beginning of the year.

“It has been a good year for pension investors. The mood has been very different from the Finnish economy in general. The fall in interest rates that started in the summer will ease the situation for households, but unfortunately, the same relief is not yet in sight for the plight of industry," Varma CEO, Risto Murto, commented.

Since the beginning of the year, equity investments have been the best performers, returning 11.2 per cent. In January-September, fixed income returned 4.7 per cent, private equity 4.4 per cent, real estate -2.1 per cent and hedge funds 6.7 per cent.

Commenting, Varma head of investments, Markus Aho, said: “With inflation starting to close to target levels, central bank concerns have turned to whether economic growth can be sustained. Economic growth is being driven by the United States, which continues to show no significant signs of a slowdown. Labour demand has calmed, but unemployment has not started to rise.”

He continued: “Geopolitical risks are particularly elevated, but markets have become numb and have not reacted very strongly to conflicts and attacks. However, there has been market turmoil that has contributed to price volatility.”

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