Varma

New record in the value of Varma’s investments, 1.7% return in H1

Share
Varma’s return on investments recovered, achieving positive figures in the second quarter. The market value of investments is the highest in the company’s history and solvency remained strong.

“Varma’s investments recovered from the market turmoil in the early part of the year and trade policy tensions failed to significantly weaken the return. Thanks to the effective diversification of the portfolio, return on investments rose to 1.7% (4.7%),” says Varma’s President & CEO Risto Murto.

The value of investments was EUR 46.4 (45.0) billion at the end of June and solvency was strong at EUR 11.3 (11.5 on 1 Jan) billion.

Fixed income investments aside, other asset classes yielded steady returns in the first half of the year. Private equity investments were the best performers at 7.8% (3.6%). The return on hedge funds, 3.4% (3.6%) significantly improved the total return on investments. Real estate investments also yielded steady returns, 2.7% (2.5%). The return on equity investments was 3.3% (7.0%). Varma’s interest income was negative at -1.5% (2.9%).

“After the early-year turmoil, the equity market recovered and US equities in particular yielded good returns. Interest income was depressed especially by emerging market fixed income investments, which suffered due to the appreciation of the US dollar and increase in political uncertainty,” says Varma’s Chief Investment Officer, Reima Rytsölä.

The share of listed equity investments in the portfolio was reduced slightly in H1 due to tensions in trade policy.

Lack of options for investors

Global economic growth continues to be relatively strong although Europe has slowed down slightly. This has supported the development of asset values, although there is also some uncertainty on the markets.

“The day-to-day business of euro investors is still defined by a lack of options in the world of low-interest-rate and relatively expensive equities,” says Reima Rytsölä.

“The greatest threat is the simmering trade war, while the gradual movement of the central banks towards a tighter trade policy does not seem to have upset the market,” says Reima Rytsölä.

Popularity of partial old-age pension levelled out

By the end of June, 20% fewer new pension decisions were made at Varma than in the corresponding period last year. The popularity of the partial old-age pension has levelled out since last year’s peak and the pension was granted to 1,024 (1,632 corresponding period last year) people in January–June.

At the end of June, Varma provided insurance for 550,000 (537,000 at the start of the year) employees and self-employed persons and for 340,000 (342,000 on 1 Jan) pension recipients.

In the first half of the year, EUR 20 million in premiums written were transferred to Varma from other earnings-related pension companies. The core of customer work is workability management, for which Varma is constantly developing tools; the latest ones being the new questionnaire tools for the early identification of workability risks.

EcoVadis, an international corporate social responsibility assessment specialist, has awarded Varma the CSR Rating Gold recognition. In its independent assessment carried out in the summer, Varma was among the top 5% of the 45,000 companies analysed.

Risks to Finnish economy from abroad 

The Finnish economy has recovered from its long economic slump and the global economy’s pull has helped Finland forward. However, it is important for Finland to prepare for a gradual slowing down of the strong growth in the global economy.

“The greatest short-term risks impacting Finland are currently related to the global economy. All barriers to free trade are especially harmful to Finland which is dependent on exports,” says Risto Murto.

Further information:

Katri Viippola, SVP, HR, Communications and Corporate Social Responsibility, tel. +358 400 129 500

Katariina Sillander, Communications and Sustainability Manager, tel. +358 040 7099 836

Keywords

Links

About Varma

Varma
Varma
Salmisaarenranta 11
00180 Helsinki

010 2440http://www.varma.fi

Varma Mutual Pension Insurance Company is a responsible and solvent investor. The company is responsible for the statutory earnings-related pension cover of some 890,000 people in the private sector. Premiums written totalled EUR 4.9 billion in 2017 and pension payments stood at EUR 5.5 billion. Varma’s investment portfolio amounted to EUR 46.4 billion at the end of June 2018.

Subscribe to releases from Varma

Subscribe to all the latest releases from Varma by registering your e-mail address below. You can unsubscribe at any time.

Latest releases from Varma

Uudet tekoälyn eettiset ohjeet ohjaavat tekoälyn hyödyntämistä Varmassa27.3.2024 08:57:39 EET | Tiedote

Haluamme Varmassa tarttua rohkeasti tekoälyteknologian hyödyntämismahdollisuuksiin. Nopeaan kehitykseen liittyy kuitenkin myös eettisiä haasteita, jotka täytyy osata tunnistaa ja arvioida. Varman tekoälyn eettiset ohjeet tehtiin varmalaisten asiantuntijoiden työryhmässä, ja niissä kiteytyvät ne tavoitteet, toimintamallit ja rajat, joita tekoälyn eettisesti kestävä hyödyntäminen edellyttää.

Varma increasingly incorporates biodiversity in its sustainability considerations – enhanced due diligence of food and textile industry companies by portfolio managers22.3.2024 09:12:02 EET | Press release

Varma has updated its environmental policy. The new environmental policy is more comprehensive than the previous one, as the revised policy guidelines for Varma’s activities recognise the importance of environmental impacts throughout the value chain. Biodiversity preservation and climate mitigation are given equal weight.

Varma huomioi vastuullisuudessa entistä paremmin luonnon monimuotoisuuden – ruoka- ja vaateteollisuuden yritykset salkunhoitajien erityisseurantaan14.3.2024 09:44:58 EET | Tiedote

Varma on päivittänyt ympäristöpolitiikkaansa. Uusi ympäristöpolitiikka on edellistä kattavampi, sillä uudistetuissa Varman toimintaa ohjaavissa linjauksissa on tunnistettu ympäristövaikutusten merkitys koko arvoketjussa. Luonnon monimuotoisuuden säilyttäminen saa yhtä suuren painoarvon kuin ilmastonmuutoksen hillintä.

In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.

Visit our pressroom
HiddenA line styled icon from Orion Icon Library.Eye