Alecta, Sweden’s biggest pensions institution, posted an 8.7% return on its main defined contribution (DC) product for January to September, saying major equity markets had rallied strongly in the period with bond assets also having grown in the third quarter.
Releasing interim results this morning, the occupational pension provider revealed its total assets grew to SEK1.33trn (€116bn) by the end of September, up from SEK1.31bn at the end of June, and SEK1.24trn at the end of 2023.
The lion’s share of those assets underpins Alecta’s defined benefit (DB) scheme, which had SEK1.03trn at the end of the third quarter, up from SEK980bn at the end of 2023.
Alecta said the DC product Alecta Optimal Pension produced an 8.7% return in the nine months to September, while the DB scheme clocked up a 6.3% gain. The DC year-to-date return for this year is now at the same level as the return for the whole of 2023.
The Stockholm-based pension fund said: “During the third quarter of the year, the global stock markets have continued to rise.
“The development can mainly be attributed to the fact that central banks have overcome troublesome high inflation, which has ushered in a new economic phase and a period of interest rate cuts to speed up growth,” it said.
Since the turn of the year, the Swedish stock market had risen by 13.5%, the institution said, while the US stock market rose 18.9% and European bourses climbed 13.1% – all in local currency terms.
With subdued inflation and lower key interest rates, Alecta said market interest rates had also fallen across the board, which has also led to positive returns on fixed-income assets.
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