Sweden’s biggest pension fund announced returns of 7.7% and 12.4% for its two main pension products for the first six months of this year, thanking rising equity prices as well as changes it had made to asset allocation for the “good return”.

Reporting results for January to June, Alecta said its defined contribution (DC) product Alecta Optimal Pension returned 12.4% – for the default option portfolio which contains 60% equities – and its defined benefit (DB) pension scheme generated a 7.7% gain.

Magnus Billing, Alecta’s chief executive officer, said: “The good return during the period is mainly attributable to the development in the equity portfolio, but also to continued active work to find a good return from the interest-bearing investments and the broadening of the asset portfolio towards more alternative investments such as real estate, infrastructure and alternative loans.”

He said the firm had delivered a good return, despite the challenges of the pandemic, and continued to have a strong financial position – something that had been achieved with “a clear and disciplined focus on cost efficiency”, the CEO said.

The latest results bring the five-year return for Alecta Optimal Pension to 10.3% and to 7.1% for the firm’s DB scheme, up from 5.6% and 4.5%, respectively, for the five years to 30 June 2020, Alecta reported.

Total assets under management (AUM) grew to SEK1.13trn (€110bn), which is up from SEK1.09trn at the end of March.

The bulk of Alecta’s AUM relates to the DB scheme, which accounted for SEK936bn at the end of June, while Alecta Optimal Pension had a portfolio of SEK198bn.

The solvency ratio for the group rose to 187%, up from 181% at the end of March, and from just 157% at the end of June 2020.

The Stockholm-based occupational pension provider said its new subsidiary, Alecta Fastigheter (Alecta Real Estate), unveiled in March 2020, had been built up during the spring and now had just more than 20 staff.

The property unit’s management team, board and the structures for management, sales and marketing were all now in place, it said.

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