Icelandic pension fund assets have increased by 7.3 per cent in nominal terms over the first half of 2021, the Icelandic Pension Funds Association has revealed.

This compares to a return of 6.3 per cent in the first half of 2020. Over the period assets rose to ISK 6,150bn at the end of June.

During the period, foreign assets accounted for just over a third of all the funds’ assets, a proportion that has been “fairly stable” this year, according to the association. Private assets held by pension funds accounted for approximately 10 per cent of the funds' total assets; this asset class has grown by 8.6 per cent so far this year.

Prepayments for new lending by pension funds in the first six months of the year amounted to ISK 24bn. Net prepayments of indexed loans amounted to ISK 32bn, while new non-indexed loans in excess of prepayments amounted to almost ISK 8bn.

The association said that recently, there has been a rapid change in household mortgages, from indexed to non-indexed loans, and when looking at all lenders, about half of household mortgages are now non-indexed. Total lending by pension funds to households amounted to ISK 486bn at the end of June, which is almost a quarter of all household housing loans.

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