The return on Keva’s investments during the first three quarters of the year was -5.9 per cent. The market value of investments was EUR 27.9 billion at the end of September. The investment return was negative owing to the decline in share prices.
According to CEO Merja Ailus, the current year has been exceptionally challenging for investors.
“It seems as though years like this could become more common than we imagined a few years ago,” Ailus points out.
“Following the worst periods of the 2008 financial crisis, we had two very good years in terms of investments. Keva’s investment returns last year, for example, reached 12.3 per cent. The capital markets were very unsettled during this period too, however,” Ailus says.
In Ailus’s view 2011 has been characterised by, in addition to the general concerns about global economic growth, the large and ever-growing debt burdens of industrialised countries, in particular.
The market value return on investments was -5.9 per cent in January–September, while the return on listed equities and equity funds was -17.4 per cent. Fixed income investments returned 1.4 per cent and real estate investments (including real estate funds) 3.7 per cent. Among the smaller asset classes, the return on private equity investments was 14.9 per cent, on hedge funds -0.8 per cent and on commodity investments -9.0 per cent.
Fixed income investments accounted for 46.8 per cent, listed equities and equity funds for 37.3 per cent and real estate investments for 8.3 per cent of the entire investment portfolio, while private equity investments accounted for 4.9 per cent, hedge funds for 2.0 per cent and commodity investments for 0.7 per cent.
According to Investment Director Ari Huotari, the situation in the capital markets has been slightly more positive since the end of September.
“In the capital markets, we have seen a cautious willingness to increase investment portfolio risks. During the past year all investors, Keva included, have had to constantly analyse their risk levels. Equities and other risk-bearing investments performed reasonably well in October. Following the latest Euro-area meetings, there has even been a bit of an equity rally.”
Huotari believes that in order for the current positive trend to continue, the political decisions made in the Euro-area must be turned into concrete actions.
“Positive signs concerning the development of the global real economy would also be welcome,” Huotari concludes.
Additional information:
Merja Ailus, CEO, tel. +358 20 614 2201
Ari Huotari, Investment Director, tel. +358 20 614 2205
Tom Kåla, Financial Director, tel. +358 20 614 2211
The figures presented in this bulletin are unaudited.
