PFA Pension, Denmark’s largest commercial pension provider, revealed average returns on its unit-link pensions dipped in 2015 compared with the year before, and forecast still lower returns for the whole of 2016.

Returns for 2015 on its unit link product PFA Plus ranged from 5.3% to 12.3% depending on customer age and product profile, the company said.

In 2014, PFA Plus returns were been between 9% and 12.8%.

Anders Damgaard, group finance director at PFA, said: “In spite of the turbulence on financial markets, we have come out of 2015 with some good returns for our customers.”

However, looking ahead to full-year returns for 2016, PFA – which had group assets of DKK550bn (€73.7bn) at the end of last September – said it expected returns for customers to be lower than in 2015, though they would be satisfactory.

Damgaard forecast PFA Plus returns would come in at between 2% and 7% for this full year, depending on risk profile, as long as prevailing interest rates stay at current levels.

Financial turbulence particularly in China and new growth markets will make it harder to generate returns for all investors in the future, PFA said.

Damgaard said 2016 had kicked off with some big falls on equity markets but added that he expected this trend to turn around.

He said last year there had been unusually big differences in the how various shares on the market had fared, which meant PFA’s ability to choose the right companies had been decisive.

“We have benefited a lot from the way we balanced our shares and therefore our investments – and thus customer returns – outperformed the market in general,” he said.

Foreign shares, for example, outperformed the market average by 7 percentage points, he said.

Investments in Danish and foreign equities had been responsible for 60% of the return for customers in 2015, while private equity, property and currency had produced the remaining 40%, PFA said.

Meanwhile, bonds generated no return at all in the year, though the instruments had played an important role as a stabilising factor.

Damgaard said PFA lowered its level of investment risk at the beginning of this year because of the prospect of high volatility in investment markets in the next few years.

He said now was the time that the firm’s active management would show its strength, as passive investment can only be expected to produce a low or at best modest return.

“But if you keep risk management tight and continue to balance investments between different asset types, as well as choose the right underlying companies and bonds, you can do better, and we put a lot of time and energy into this for it to succeed,” Damgaard said.

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