The financial outlook brigthened in April

Since the outbreak of the Iran conflict in late February, geopolitical tensions have dominated financial markets. Bond and equity markets declined in tandem as energy prices surged, and even gold – traditionally seen as a safe haven during times of geopolitical unrest – offered little protection. Fortunately, the situation has evolved significantly since then.  

By early April, markets had rapidly recovered more than the losses recorded in March, with global equities reaching new all-time highs. This rebound is notable given that many of the underlying economic challenges linked to the conflict remain unresolved: The Strait of Hormuz, through which around 20 per cent of the world’s oil supply would normally pass each day, remains blocked, and there have been no clear breakthroughs in peace negotiations. On the contrary, threats of further attacks continue to be exchanged on a daily basis. 

What has driven the market recovery?

So what has fuelled the rebound in equity markets? 

In my view, financial markets have largely moved past the conflict. One clear indicator is energy stocks, which were among the preferred ‘safe havens’ during the market turmoil in March, but which have since fallen back significantly. 

Instead, other segments of the equity market have taken the lead. In particular, the major US technology companies have been at the forefront of the market’s comeback. Perhaps because these companies prove, quarter after quarter, that behind their high valuations are bobust business models and strong earnings capacity. Or perhaps because most indicators suggest that investment in AI infrastructure is likely to exceed expectations.

Looking ahead, I expect a broader range of equities to contribute to returns as the year progresses. This outlook is underpinned by a generally positive view of economic prospects, which so far appear resilient despite the sharp rise in energy prices. Provided that hostilities subside within a foreseeable timeframe and energy transportation gradually normalises, the global economy should remain on a solid footing and inflation stay under control. Ultimately, much will depend on whether Donald Trump and Iran succeed in de-escalating tensions. 

Velliv tops the industry this year – and April turned negative returns into positive ones 

At Velliv, we have responded swiftly since the outbreak of the conflict to ensure that our customers’ pension savings are managed as effectively as possible through volatile market conditions. 

By the end of March, a typical Velliv customer with a medium-risk profile and 15 years until retirement had recorded a return of between -2.0 per cent and -2.3 per cent. Reporting negative is never pleasant, but compared with the rest of the industry, our returns ranked among the best.  

Fortunately, developments in the financial markets turned markedly in April, delivering positive returns of between 5.6 per cent and 6.8 per cent. This lifted the total return for the year to between 3.8 per cent and 4.6 per cent. It represents a significant turnaround and serves as an important reminder to take a long-term perspective when it comes to pensions. And to remember that fluctuations in investments are a natural part of building pension savings over time.

I therefore continue to hold a positive view of the outlook for pension returns as we sum up 2026.