“At the moment we cannot overweight or underweight with any particular conviction and that needs to be changed,” Mika Pesonen, the fund’s chief investment officer, who joined the firm in August from the Finnish State Pensions Fund, told nrpn. “All of our competitors are able to do so and next year it is our intention to do so too – we want to be able to act more tactically.”

Mr Pesonen added that the fund had maybe missed out on certain movements in the markets and that a change to its investment guidelines would make it more competitive.

According to figures from Etera, the firm was the third best performing insurance fund last year with 11.7 per cent, behind Ilmarinen on 12.1 per cent and Pension Fennia at 11.9 per cent. Varma pulled in 11.6 per cent, Veritas 10.7 per cent and Tapiola 9.2 per cent.

“Just because we intend to change our investment guidelines next year,” said Mr Pesonen, “does not mean, however, that we need to change our investment strategy. We are happy with our general exposure to each asset class but we need to be more flexible around the edges. Our limits are too tight and that needs to be changed.”

Mr Pesonen did admit, however, that the fund needed to diversify its investments more as well concentrate its efforts on fund selection.

As of the end of September 2006, the fund had 36 per cent of its asset allocated to equities, 49 per cent invested in fixed income, 1 per cent in cash, 3 per cent in loans and 11 per cent in real estate.

CN

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