FINLAND - Valtion Eläkerahasto (VER), the country's state pension fund, saw its assets increase to almost €13bn in the first six months of 2010, as its equity portfolio performed best of all assets.

VER, which saw growth of 4.1% at the end of June, saw its total assets grow from €12.3bn to €12.9bn, while all mandates offered positive returns.

Timo Löyttyniemi, managing director of the state pension fund, said the Asian market would continue to grow in significance as the region recovered from the market downturn faster than other areas.

He added: "Interest rates are expected to remain low in the autumn, but the upturn in the equities market requires that earnings continue growing."

The fund, which increased its exposure to fixed income by just under 2% over the last six months, invests 56.7% in said assets, with a further 38.7% in the equity market and the remaining 4.6%, a slight increase over December 2009, invested in other assets, such as private equity and real estate.

Its equity portfolio offered the strongest returns with 5.5%, followed by more than 3% growth from the fixed income portfolio.

Finally, the other assets returned to growth after negative returns of almost 15% last year, increasing by 2.3%.

At 4.1% returns, the first half of the year also saw VER offer stronger growth than its five-year average, which currently lies at 3.4%.

It also predicted that, with recent regulatory changes that will see university employees switch contribution payments to the private pension system, VER would see a gradual reduction in inflows from contributions.

A second Finnish pension provider recently announced its half yearly results, with Tapiola Pension witnessing growth of 3.9% at the end of June. 

While the returns were weaker than during the same period last year, the company's investment director Hanna Hiidenpalo said the returns should be considered positive in light of the current global economy.

"The investment environment has continued to be challenging, in particular due to the strong volatility of markets," she said.

The company saw its strongest returns from bonds, which grew by 5.1% and aided Tapiola's overall assets under management to increase to €9bn.

Fixed income returned 4.7%.

While bonds performed stronger than during the same period last year, the company's equity investments returned only 3.1%, down from more than 14% in June 2009.

However, real estate markets offered better returns, growing by almost 2 percentage points.

Satu Huber, managing director of the company, remained cautious about the outcome.

"The investment outlook for the latter half of 2010 still has a lot of uncertainty," he said.

"The investment environment is challenging, and the return levels of last year are not likely to be achieved.

"The general feeling regarding economic growth currently is that of wait and see."

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