DENMARK - Investments at Denmark's biggest commercial pension provider PFA Pension returned 5.5% in the first half for its core with-profits product, up sharply from last year's fractional interim profit.

The company said returns for the six months to the end of June proved the flexibility of its investment strategy.

In the first half of 2011, PFA Pension reported an investment return of just 0.4% for its traditional with-profits plans.

Anne Broeng, director and chief financial officer, said: "The results show that PFA has a good and flexible investment setup."

The strategy focused, she said, on spreading risk and active capital management, and was able to handle the huge swings on the financial markets and still produce good results.

The return of 5.5% for traditional with-profits plans is an average.

Depending on their yield group, customers received investment returns of between 4.3% and 7% for the first half.

Returns on unit-link pensions at PFA Pension ranged from 5.4% to 8%, depending on risk profile.

Investment results were boosted by the performance of corporate bonds and equities, a development that was due in part to monetary easing in the euro-zone, the company said.

Danish shares performed strongly, returning 16.1% in the period, while corporate bonds produced 8-10%.

In absolute terms, PFA Pension's investment return for traditional with-profits pensions was DKK16.1bn (€2.16bn) for the first half, up sharply from the DKK790m reported at the same stage last year.

However, returns did bounce back in the second half of 2011 to end the year at DKK27.3bn.

Noting the fall in Chinese central bank rates, and indications from the European Central Bank of further credit easing, PFA Pension said this meant the "positive development" had continued into the second half of 2012.

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