The past six months have been a rollercoaster ride for pension returns at both Sampension and PFA.
At first it went well. Then it went really badly. And now everything that was lost has been made up for – plus a little more.
The returns for some of the country’s pension savers have been on a bit of a rollercoaster ride in the first six months of the year.
Preliminary figures for the pension companies Sampension and PFA indicate that the first half of the year will end with a positive return overall.
At Sampension, the preliminary return for the first half of the year across age and investment profile is 2.4 percent, the company reports.
At PFA, the preliminary return for a typical customer with medium risk and 20 years to retirement is 1.9 percent.
The two figures cannot be compared, as the return may vary depending on age and investment profile. The pension companies have calculated the figures as of June 25.
Wild start to the year
If you ask Henrik Olejasz Larsen, investment director at Sampension, the year has started wilder than expected with Donald Trump’s return to the White House.
“Especially in the stock markets, we have seen strong unrest and some sometimes violent fluctuations during the first half of the year. This is especially true in connection with Trump’s ‘Liberation Day’ at the beginning of April, when he really kicked off the trade war,” he says in a comment on the development.
It was on April 2nd that US President Donald Trump announced a list of varying tariffs targeting goods from abroad.
He subsequently put tariffs on hold for 90 days, during which a lower base tariff of ten percent would apply to most countries. The pause for the EU, among others, expires on July 9.
It was especially right after April 2 that things looked really bad for the return on Danes’ pension savings. This is according to Tine Choi Danielsen, chief strategist at PFA.
“Based on the market reaction, we have to say that it surprised everyone that the tariffs were so high. We had expected something to come, but probably not in this way and on this scale,” she says.
The development meant that a typical PFA customer in April reached a return of minus 9.6 percent for the year.
US stocks set record
Then the tariff break and subsequent positive steps in negotiations between the US and China gave the stock markets and thus also the Danes’ pension assets a boost.
On Friday, the two major US stock indexes, the S&P 500 and Nasdaq, closed at their highest levels ever.
However, this does not completely affect Danish investments in American stocks, explains Tine Choi Danielsen.
This is because the dollar has weakened. So when investments in US stocks are converted into Danish kroner, there is still a general decline for the year, it says.
During the first half of the year, PFA has exchanged dollars for Danish kroner to reduce its exposure to fluctuations in the dollar exchange rate.
Although the pension return at PFA has moved up in the positive for the year, it is still slightly lower than in an average year, says Tine Choi Danielsen.
“It’s probably a bit on the low side, but it’s nothing exceptional. We’ve often had crises where share prices fluctuate a lot. But it’s still been quite unusually volatile this half-year,” she says.
Ritzau
