Varma’s investments return 2.6% as US equities enjoy strong momentum

Written by Adam Cadle

18/08/2023

Varma’s investments returned 2.6% in H1 2023 compared to -4.3% in H1 2022, due to US equities enjoying strong momentum.

The value of Varma’s investments in H1 2023 was €57.4bn compared to €56.2bn on 1 January 2023.

Of Varma’s investments, listed equities returned 5.2% (H1 2022: -17.1%) and the return on fixed income investment was 1.8% (-4.6%). Private equity investments returned 3.9% (12.1%), real estate investments -3.3% (3.8%) and hedge funds 2.4% (4.5%).

The insurer’s solvency ratio was 129.9% (130.5% on 1 Jan), and solvency capital was 1.7 times the solvency limit.

“From the perspective of investments, the first half of the year was divided,” Varma President and CEO Risto Murto said. “There were exceptionally large differences within the investment portfolio. Of Varma’s investments, US equities performed well, whereas Finnish equities experienced the weakest performance among the industrialised countries. It looks as though Finland is sliding into an industrial recession.”

Varma CIO, Markus Aho, said real estate is yielding negative returns because it is “still in the process of adapting to the new investment environment created by tight monetary policy”.

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