The investment assets of Finnish earnings-related pension providers totalled €241bn at the end of March 2023, figures from the Finnish Pension Alliance (Tela) have shown.

This represents a €3bn increase from the €238bn of assets recorded at the end of 2022.

Investment assets in the private sector accounted for €152bn of the total, while assets in the public sector accounted for €89bn.

By investment type, equities made up €129bn (53 per cent) of the total assets, fixed income investments accounted for €68bn (28 per cent), real estate investments made up €23bn (10 per cent) and alternatives accounted for €21bn (9 per cent).

Nearly a quarter (22 per cent), or €53bn, of the assets were invested in Finland, while 61 per cent (€146bn) were invested in non-euro area countries and 17 per cent (€42bn) were invested in other euro area countries.

In the first quarter of 2023, investment returns in nominal terms were 1.7 per cent, although in real terms they were -0.4 per cent.

Equities performed best in Q1, returning 2.5 per cent in nominal terms and 0.4 per cent in real terms.

By comparison, fixed income investments returns were 1.5 per cent in nominal terms and -0.5 per cent in real terms, real estate returned 0 per cent in nominal terms and -2 per cent in real terms, and alternatives returned 0.1 per cent in nominal terms and -1.9 per cent in real terms.

In an accompanying blog, Tela analyst, Kimmo Koivurinne, described the start to 2023 as “semi-cloudy”.

“This year began on the financial markets in an uncertain mood, to say the least,” he wrote.

“At the beginning of January, investors were worried by central banks’ interest rate rises, the impact of inflation on consumer purchasing power, energy shortages and slowing economic growth.

“However, the prospects were not entirely negative. Central banks’ interest-rate rises had started to have an effect, and inflation had started to decline after a long gallop.

“Unemployment figures in the Eurozone continued to fall, and even China had begun to finally loosen Covid restrictions.

“In addition, the performance scenarios for the main asset classes had improved due to firms’ falling multiples of earnings and normalised interest-rate level.”

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