Tapiola Pension Interim Report 1 January – 30 September 2010
PRESS RELEASE
21 OCTOBER 2010
- Tapiola Pension’s net return on investments at current value was 8.0% for 1 January to 30 September 2010.
- The solvency ratio strengthened at the end of September to 28.7%, and the solvency position was 2.9.
The return on Tapiola Pension's investments doubled from the end of June to the end of September 2010. “The positive trend in investment markets underpinned our result. Return on investment rose to 8.0 per cent (10.5%). From the start of July to the end of September, the return was as high as 4 per cent. The strengthening of the equity market continued in July and again in September,” says Investment Director Hanna Hiidenpalo from Tapiola Pension.
From the start of the year, equity investments and bonds have yielded the best return. Direct equity investments yielded almost 14%. Equity investments in Finland and the Nordic countries yielded a particularly high return (23%); the return in Sweden was as high as 40%. Government bonds yielded close to 10% and corporate bonds nearly 7%.The return on equity investments and fixed income investments outperformed the market as a whole.
The proportion of equity investments in Tapiola Pension’s investment portfolio increased slightly during the summer, partly due to the rise in equity prices. Equities now constitute approximately one third of the investments.
The basis for the excellent return on fixed income investments is the successful selection of countries and companies in Europe and other markets. A large proportion of the government bond portfolio has been invested in bonds issued by the Finnish and German governments.
Analysis of investments plays a key role
“With the rise in investment returns, the company’s solvency also strengthened further, reaching an excellent level,” says Satu Huber, Managing Director. Tapiola Pension’s solvency ratio at the end of September was 28.7% (21.9%), and the solvency position was 2.9 (3.4). Without the temporary changes in legislation, the solvency ratio would have been 23.5% (17.0%) and the solvency position 2.4 (2.7). “Good liquidity in the markets, low interest rates, companies’ good performance and investors’ continued appetite for risk seemed to sustain the investment market in October. Serious structural problems continue in the real economy. Their realisation in the form of weakening financial key figures increases the possibility of a downshift in the market. With an operating environment like this, continuous and thorough analysis of investments plays a key role,” Hanna Hiidenpalo says.
Additional Information:
Investments by risk category, PDF Development of solvency, PDF Hanna Hiidenpalo
Investment Director
Tel. +358 9 453 3310
Satu Huber
Managing Director
Tel. +358 9 453 2619
E-mail addresses are in the form firstname.lastname@tapiola.fi.