SH Pension has revealed that its H1 returns fell from 4.6 per cent in H1 2024 to 0.5 per cent in the first half of 2025, although there were climate improvements, as the fund overhauled its portfolio with lower-cost, low-carbon fund alternatives.

The fall in returns, the fund explained, was due to “rapid” fluctuations and moves in the market that have a major effect on several assets, including the turbulence triggered by US trade tariffs earlier this year.

The report also showed that shares performed weakly during the first half of the year at -1.7 per cent, driven by a sharply weakened dollar and the uncertainty that US policy has created.

However, the fund’s focus on alternative investments "paid off" in the first half of the year, according to the fund, as it had a return of 4.3 per cent at the end of June, which was the asset class that has performed best this year.

Additionally, interest rates also contributed positively, while properties have performed the weakest of the asset classes, with a value development of -2.9 per cent.

The total return for customers has been maintained this year despite the drop in total return, with the bonus rate varying between 5 and 7 per cent.

SH Pension CEO, Annelie Helsing, said: "It is gratifying to see that our investment in alternative investments is yielding results.

“Despite a turbulent market climate, we have managed to maintain the bonus rate for our customers, currently 6 per cent, which once again shows that traditional insurance is a form of savings that can provide stable and predictable returns even during volatile periods.”

The interim report also showed that the overhaul of SH Pension’s portfolio has been a focus during the first half of 2025.

The overhaul saw the fund implement several changes to its traditional portfolio, including a gradual liquidation of directly owned properties to increase the share of equities and fixed income in the future.

In particular, SH Pension has replaced several funds in the traditional insurance portfolio with alternatives that have both a lower fee and lower climate impact.

This means that it is “far ahead” of schedule for achieving climate neutrality in terms of carbon dioxide emissions, with the goal to reach net zero by 2050.

In addition to this, as part of its overhaul, the fund implemented new investment guidelines aimed at achieving returns comparable to lending alternatives and creating a more aggressive and cost-effective portfolio.

The strategy also involved selling directly owned properties, increasing investments in alternatives, equities, and interest-bearing assets, a transition to modern systems and more distribution channels.

In May, SH Pension had a partnership collaboration with brokerage house Säkra, which has resulted in SH Pension's reach among insurance intermediaries more than doubling.

In addition to this, the fund has carried out several key recruitments, which it said will strengthen the organisation for the autumn.

Additionally, the company’s transformation since 2023, including a new IT infrastructure and insurance system, is delivering greater flexibility, speed, and organisational robustness.

"We are starting to see the end of the business's transformation journey and the positive effects of, among other things, changing insurance systems, broadening distribution and improving the offering,” Helsing said.

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