Denmark’s PFA Pension, the Nordic country’s biggest commercial pensions provider, reported a DKK30.7bn (€4.1bn) investment return in the first nine months of this year, up from DKK7.4bn in the same period last year, with interest rate and currency hedging contributing almost half of this.

In its interim financial report, PFA said these hedging activities contributed DKK13.9bn to the overall investment return.

In the report, the pension provider said: “PFA revised its investment strategy at the end of 2015 to take account of the prospect of more turbulent equities markets, a stabilisation of the dollar after two previous years of strong rises and the low level of interest rates.

“A lower allocation to equities combined with a larger proportion of corporate bonds and real estate has had a positive impact on returns in 2016.”

In percentage terms, PFA produced a 10.3% pretax return for traditional average rate (gennemsnitsrente) pensions, though this was lowered to 2.4% after market value regulation.

This compares with 1.6% for average-rate pensions in the same period last year.

Meanwhile, the pretax return for market-rate pensions was 4.8%, down from 8.8% in January to September 2015.

Listed equities produced a return of just 0.2% in the nine-month period, while alternative investments generated 10%.

Property returned 1.7%, while bonds gave a 5.1% return in the period, it said.

In absolute terms, bonds returned a total of DKK13.4bn in the period, with the highest return within the asset class being from emerging markets paper, with a 10.6% return.

PFA said this had been underpinned by falling yields and rising currency values in many growth economies.

High-yield and investment-grade bonds also produced high levels of return at 8.6% and 6.8%, respectively, in the January to September period.

Danish bonds returned 5.3%, supported by a solid return on mortgage bonds.

PFA’s total assets rose to DKK566.8bn at the end of September from DKK545.3bn at the end of December last year.

PFA’s figures include assets transferred from Bankpension, whose merger with PFA was approved on 9 June at the general meetings of both institutions.

For accounting purposes, the merger took effect on 30 September.

The merger meant a transfer of DKK22.9bn of investment assets to PFA, 17,000 scheme members and monthly contributions of DKK77m.

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