Danish pension company, PFA, has made a return of DKK10bn for market-rate customers in the first quarter of 2021, it has revealed.

The prospect of reopening after the Covid-19 lockdowns and renewed growth around the world has generated new optimism, particularly in the world’s equity markets, PFA said.

This was also evident in the first three months of the year, when PFA generated a return of DKK 10bn for market rate customers, which is, in particular, attributable to PFA’s large equity portfolio, which yielded a total return of 5.9 per cent.

“The past year was extreme in every way. However, even though the Covid-19 pandemic is still raging, the ongoing vaccine rollout has created hope that we can soon reopen society and return to normal everyday life.

“That optimism also drove the equity markets significantly in the first three months of the year and has particularly rewarded some of the companies that were otherwise impacted by the lockdown. This made a positive contribution to the return in market rate, which totals DKK 10bn,” PFA group CIO, Kasper A.Lorenzen, said.

The total return in the market rate environment after the first quarter is 3 per cent. The positive development in the equity markets has particularly rewarded customers in high-risk profiles, as they have benefited most from this progress, while also being less affected by the price declines that occurred in the bond markets as a result of rises in interest rates.

This means that PFA’s market rate customers have received returns of up to 6.3 per cent, depending on their chosen investment profile, while the more bond-heavy low-risk profiles have performed less well.

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