Sweden's Alecta sees DB investment returns decline to 2.1%

Alecta’s return on investment for defined benefit (DB) schemes was 2.1 per cent over the first nine months of 2020, less than a fifth of the 10.6 per cent achieved over the same period in 2019.

The Swedish pension provider noted that, over the past five years, the average annual return has been 5.5 per cent amongst its DB schemes, while its total portfolio of DB schemes amounted to SEK 849bn at the end of the period, compared to SEK 797bn at the same point last year.

Meanwhile, assets under management in the total portfolio for Alecta’s defined contribution Optimal Pension, a pre-selection portfolio consisting of 60 percent shares, amounted to SEK 158bn at the end of the period, up from SEK 131bn 12 months earlier.

The return on investment for this portfolio was 2.4 per cent, below both last year’s reading of 14.5 per cent and the five year average of 7.3 per cent.

In DB insurance, group consolidation amounted to 144 percent on 30 September 2020, edging up from 142 per cent after 2019’s third quarter.

Alecta's solvency ratio was 162 percent on September 30, a slight improvement on last year’s reading of 159 per cent.

The total capital managed by Alecta was SEK 1,007bn at the end of the period, up from SEK 928bn a year prior.

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