Finnish pension company Elo has revealed that its net investment return on assets was 1.6 per cent in the first quarter of 2023.

This represents an increase from the -1.9 per cent it returned in the first quarter of 2022.

The investment result at current values was €23.4m in Q1 2023, up from - €515.7m the previous year.

The market value of investments was €28.7bn, down slightly from €28.8bn in Q1 2022.

Elo’s solvency ratio fell from 126.1 per cent to 121.2 per cent during the same period, while its solvency capital remained at 1.6 times the solvency limit.

The pension company noted that most of its asset classes produced positive results in a challenging market situation.

Economic growth continued to be good and inflation remained high at the start of the year, Elo stated, although, in March, the uncertainty of the investment market increased and expectations for economic growth weakened as certain banks ran into difficulties amid rising interest rates.

Elo’s return on equity investments was 2.6 per cent, up from -3.3 per cent the previous Q1, while its fixed income investments returned 1.3 per cent, up from -1.7 per cent.

However, due to the rise in interest rates, Elo’s return on real estate investments fell from 1.3 per cent in Q1 2022 to -0.3 per cent in Q1 2023.

“The total return on Elo's investments continued to be positive in the beginning of the year as well,” said Elo vice president, Hanna Hiidenpalo.

“The reduction in the price of energy and the opening up of China maintained the good momentum of the economy and the stock market, which is why stock investments yielded well.”

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