The Swedish Volvo pension scheme, VFF Pension, made an operating profit of SEK 7.9m in H1 2025, down 99 per cent from SEK 852.6m a year earlier, as Q2 market improvements failed to offset turbulence triggered by US trade tariffs earlier this year.

The scheme said that during the first half of 2025, the financial markets were characterised by strong volatility, rapid fluctuations in risk appetite, and revaluations of monetary policy and geopolitics.

Market movements were largely driven by the US’s “unexpected” trade measures and changing inflation expectations. Despite this turbulent start, several asset classes recovered in the second quarter.

In particular, the group revealed that global equities (which had a value of SEK 2.9bn) suffered a notable decline, with a return of -5.7 per cent compared with 16.3 per cent last year.

In addition to this, Swedish equities delivered a modest return of 1.6 per cent, a sharp fall from 11 per cent in the same period last year.

Whilst alternative investments contributed positively to returns at 2 per cent in the first half of 2025, this was also a year-on-year decline of 6.6 per cent.

However, fixed income assets performed well, with returns of 3.4 per cent, up from 0.5 per cent in the first half of last year, driven mainly by holdings in longer-duration funds.

The total market value of investment assets, including the portfolio's cash, amounted to SEK 13bn.

The interim report also showed that the scheme’s premium income rose to SEK 458.3m in H1 2025, up from SEK 429.7m a year earlier.

VFF Pension attributed the increase to “significantly” higher ordinary premium payments from the Volvo Group, driven both by a larger number of participants and higher contribution levels.

It explained that as the Volvo Group makes its annual payment in the first quarter, premium income tends to be higher during this period.

The report also revealed a slight increase in the insurance claims paid from SEK 120m to SEK 124.3m.

Meanwhile, the fund’s net investment return was SEK 75.2m, compared with SEK 729.1m in the prior-year period, which limited the total return on managed assets to 0.4 per cent in H1 2025, down from 6.6 per cent in H1 2024.

The interim report also revealed that the fund’s solvency ratio improved from 164 per cent to 166 per cent, while its funding ratio (collective consolidation measure) fell from 117 per cent to 111 per cent.

Operating expenses also declined slightly to SEK 11.1m from SEK 11.5m.
At the same time, assets under management grew from SEK 12.3bn to SEK 13.0bn, reflecting positive inflows and stable contributions.

In the first half of 2025, the fund reduced its administrative fee from 0.3–0.4 per cent to 0.27 per cent, effective from January.

Its bonus rate was lowered from May in response to weaker investment returns, with average rates for the first half ranging from 7.7 per cent for Volvo Corporate Pension to 14.2 per cent for PLUSpension.

---