Varma’s investments returned 2.6 per cent – US equities enjoying strong momentum

Of Varma’s investments, US equities performed best in the first half of the year. In the summer, inflation took a downward turn and interest rates reached their peak. Varma received international recognition by being ranked third in a comparison reviewing the transparency of responsible investing.

The return on Varma’s investments in January–June was 2.6 (-4.3) per cent. The value of Varma’s investments was EUR 57.4 (56.2 on 1 Jan) billion.

“From the perspective of investments, the first half of the year was divided. 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,” says Risto Murto, Varma’s President and CEO.

Of Varma’s investments, listed equities returned 5.2 (-17.1) per cent. The return on fixed income investments was 1.8 (-4.6) per cent, private equity investments 3.9 (12.1), real estate investments -3.3 (3.8) and hedge funds 2.4 (4.5) per cent.

“In general, sentiment in the investment markets in the second quarter was positive, and the enthusiasm around artificial intelligence also sparked some optimism about the future, raising the valuation of technology companies. However, some asset classes, such as real estate, yielded negative returns. These asset classes are still in the process of adapting to the new investment environment created by tight monetary policy,” says Chief Investment Officer Markus Aho.

Varma’s solvency ratio was EUR 129.9 (130.5 on 1 Jan) per cent, and solvency capital was 1.7 times (1.8 on 1 Jan) the solvency limit. Varma maintains strong solvency through investment returns.

“Central bank communications suggest that interest rates will soon reach their peak. That said, if the global economy continues as strong as it is today, a fall in interest rates is not likely. However, a situation where fixed income investments yield a return is more sound for investors,” Aho says.

Varma ranked third in a global responsible investing comparison

Varma received international recognition by being ranked third in the Global Pension Transparency Benchmark comparison reviewing the transparency of responsible investing. The comparison included 75 pension companies from 15 countries. Varma was one point short of reaching first place, which was shared by Norway’s oil fund and BOUW, a Dutch construction industry pension fund.

Varma continued its own biodiversity work by looking into how listed companies that operate in sectors exposed to biodiversity loss take the risks of biodiversity loss into consideration. In the analysis, we surveyed, based on publicly available information, biodiversity policies in our listed equity investments. European companies were more advanced compared to companies operating in North America and Asia.

Forecasting birth rate and immigration poses a challenge to the pension system reform

The new government programme contains a goal of reforming the pension system. The pension system is on a solid foundation but there is reason to review the balance of the system at regular intervals. According to the latest Pension Barometer of the Finnish Centre for Pensions, two Finns out of three trust the pension system.

“Regarding the balance of the pension system, the situation evolves. Two key factors – immigration and birth rate – are exceptionally difficult to predict. Traditionally, the debate has been dominated by the uncertainty of investment returns, but not now,” Murto says.

According to Statistics Finland, net immigration to Finland rose to a new record last year. The birth rate, however, continued to decline in the first half of the year. A low birth rate has an impact on the sustainability of the pension system in the future, whereas labour immigration, if it were to continue, would relieve the pressure to raise earnings-related pension contributions.

The TyEL payroll of Varma’s client companies grew 6.3 per cent in January–June compared to the same period last year. Growth has been brisk throughout the first half of the year. Payroll growth increases income for the earnings-related pension system, strengthening the financing of earnings-related pensions in the long term.

The number of full disability pensions for mental health reasons started to grow

The number of new disability pensions granted grew by 8.9 per cent compared to the same period in 2022. Growth was particularly strong in full disability pensions. This deviates from recent years’ trend of rising partial disability pensions.

The number of new disability pensions granted based on mental disorders grew by 18 per cent compared to the same period in 2022. Mental disorders were the primary reason for disability among those under 45. The number of disability pensions granted based on musculoskeletal diseases decreased 7 per cent in January–June.

Varma Mutual Pension Insurance Company is a responsible and solvent investor of pension funds. The company is responsible for the statutory earnings-related pension cover of 980,000 people in the private sector. Varma’s premiums written totalled EUR 6.1 billion in 2022 and pension payments stood at EUR 6.5 billion. Varma’s investment portfolio amounted to EUR 57.4 billion at the end of June 2023.

Additional information:

Hanna Kaskela, Senior Vice President, Sustainability & Communications, tel. +358 40 584 5045 or hanna.kaskela(at) 

Marjut Tervola, Communications Manager, tel. +358 45 673 0120 or marjut.tervola(at) 


Half-year report presentation

Half-year report

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