SWEDEN - Swedish pension fund AP3 reported returns of 5.3% before expenses in the six months ended June 30.
Returns were buoyed by stronger equity markets and falling credit and liquidity risk premiums, the pension fund said.
Coming into the year, the pension fund adopted a cautious investment strategy by diversifying its real estate portfolio and increasing its exposure to high yield fixed income products.
The SEK188bn (US$26.7bn) portfolio includes a 48.1% allocation to equity, 5% to private equity, 35.6% to fixed income, 8.4% to real estate, 2.6% to "new strategies" and 0.3% to alpha strategies.
Strong equity performance also benefited AP1 which reported a total return on its portfolio of 6.8% before operating expenses for the first half of 2009.
The fund's equity exposure at June 30 was 56%, while exposure to the fixed income market was 39% and exposure to alternative investments was 5%.
At June 30, 2009 AP1 had net assets under management of SEK181.4bn.
This year, the scheme began using a new investment model that focused more on strategic asset allocation decisions, including an emphasis on the overall risk levels of the portfolio and less on bottom-up stock picking. As a result, some 20 employees were made redundant. (Global Pensions; February 11, 2009)
Meanwhile, pension manager AMF posted a 4.8% profit for the first of 2009 benefiting from strong equity and active strategies returns.
The positive results also pushed up its solvency ratio by 42 percentage points from the beginning of the year to 228%.
The news comes ahead of a key election this autumn that allows privately owned companies to vote on whether or not to keep their pension providers.
AMF president Ingrid Bonde said: "It is very gratifying that we are once again showing high returns."
A number of pension schemes have been prompted to lock in gains with a move into bonds after the estimated deficit across FTSE 100 DB pension schemes improved by £36bn, over the 12 months ending 30 June last year, JLT Employment Benefits found.
HM Treasury has agreed in principle to give NEST a £329m contingent liability guarantee in the event of the master trust's wind up or closure.
AMP Capital has set up a dedicated team to help institutional investors, including pension funds, invest in infrastructure through direct equity allocations.