DENMARK - Gains in equities and property helped MP Pension, the Danish pension fund for psychologists and people with advanced university degrees, offset bond losses and pull its investment return back into the black, the fund's half-year figures reveal.

Strong returns in listed stocks and real estate contributed to a 2.7% return before tax in the first half of 2007, giving the pension fund an improved return on the year-earlier period when the Dkk50.1bn (€6.73bn) fund suffered a loss on investments of 0.9%, MP said in its interim report.

Shares returned 8.6% before tax in the first half of this year, real estate portfolios returned 11%, while the rise in yields over the six months caused a 1.7% pre-tax loss for the fund's bond investments, the fund said.

Noting the turmoil and price falls seen on stock markets at the end of July and other market factors, the fund has now forecast a lower result for the full year.

"Against this background, we must expect a more modest result for the remainder of 2007," it said.

The rise in bond yields earlier this year also resulted in a fall in the value of MP's interest-rate hedging instruments, which it holds to hedge against the risk of pension reserve losses through a fall in interest rates. This hit the pension fund's official return figure for the half-year, MP said, bringing it down to 0.3% before tax from the 2.7% investment return figure.

Overall, the pension fund said it had a surplus before bonus of Dkk1.45bn (€190m) in the first six months of the year, against a shortfall of Dkk268mn before bonus in the corresponding period last year.

"MP has thus consolidated its position in the Financial Supervisory Authority's traffic-light scenarios, with significant excess coverage in both the red and yellow light scenarios," said MP.

The fund took on almost 2,000 new members in the first half which, it pointed out, was a big rise from the 1,400 newcomers seen in the first half of 2006.