Danish pension provider PFA said it made a 12% return on average for customers in 2023 and expects to deliver positive returns again this year.
Kasper Ahrndt Lorenzen, group chief investment officer at Denmark’s largest pension provider, said PFA had managed its equities exposure well in 2023, and that this was one of the reasons for the year’s overall returns.
PFA said that a typical pension customer in PFA’s recommended profile could look forward to returns of around 12% for 2023.
Ahrndt Lorenzen said: “When we started 2023, we were a bit cautious regarding the economy – also in relation to whether the central banks actually would be able to bring inflation down as quickly as possible.”
“But fortunately, at PFA we have been moderately positive and constructive for most of the year,” he said in a video on the DKK736bn (€78.1bn) pension fund’s website.
Ahrndt Lorenzen said PFA had taken on equity risk, buying shares that had ended up performing very well. He added that in its equity tactics, PFA had focused on the large US stocks that had done particularly well, while having a “really sensible” Danish portfolio.
“We have made sure we didn’t have too much exposure to emerging markets, and China in particular has had a bit of a hard time,” the CIO said.
Looking ahead, Ahrndt Lorenzen noted there was no doubt that economic conditions were much better at the start of 2024 than they had been on entering 2023.
“We estimate that 2024 will be quite a reasonable year, and we expect a positive return – although we may scarcely be able to expect double-digit returns again,” he said.
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