28 April 2010
- Tapiola Pension’s net return on investments at current value was 4.4% for 1 January to 31 March 2010.
- Return on equity investments was 9.0 per cent, and return on fixed income investments was 2.9 per cent.
- The solvency ratio rose at the end of March to 27.2%, and the solvency position was 3.3 times the solvency limit.
For the first three months of 2010, return on Tapiola Pension’s investments was 4.4 per cent (–0.1% 1–3/2009). “Investment markets have developed positively in the beginning of 2010,” says Tapiola Pension’s Managing Director Satu Huber. “The global economy has recovered more quickly than expected. A cautious attitude should, however, be adopted towards the sustainability of the growth.”
Tapiola Pension’s return on equity investments was 9.0 percent (–4.5%). “The good return was supported by the strengthening of the equity market in March,” says Investment Director Hanna Hiidenpalo. “During the first part of the year, the Nordic countries have performed better than other markets.” Europe and emerging markets were the weakest regions measured in local currencies. Among the currencies, the euro weakened substantially against other major currencies, which improved the euro-based return on investments made outside the euro area. Cyclical industries clearly outperformed defensive ones. Negative news about the Greek economy did not have much of an effect on the equity market.
Return on Tapiola Pension’s fixed income investments rose up to a level of 2.9 per cent (0.9%). In the fixed income market, news from Greece has held the main role. The return on fixed income investments has, however, remained at a good level. “As the market’s willingness to take risks has remained high, risk premiums have tightened especially in the high yield markets and the emerging markets,” says Hiidenpalo. “In the first part of the year, these markets have produced a return in excess of ten per cent. Interest rates are low, and inflation expectations and the volatility of fixed income have decreased.”
“The investors’ risk appetite remains high,” estimates Hiidenpalo. “This supports the equity market in the short term, but in the longer term, there is a distinct possibility of new price bubbles forming. At the moment equity markets are supported by low interest rates, good liquidity and lack of alternative investment opportunities.”
At the end of March, Tapiola Pension’s solvency ratio was 27.2 per cent (16.4%) and the solvency position 3.3 times the solvency limit (2.8). Without the temporary changes in legislation, the corresponding figures would have been 22.1 per cent (11.7%) and 2.7 (2.0).
Tapiola Pension’s net return on investments (pdf)
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Investment DirectorTapiola Corporate Communications
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