Analysis of the Performance of Icelandic Pension Funds: Competing with the Pension Funds

Hörður Sigurðsson

Student thesis: Master thesis


Pension funds are large institutional investors that play a big role in many economies. One of those economies is Iceland where the total assets of pension funds amount to over 160% of the GDP. The main purpose of these pension funds is investing the contributions they receive from their members and to pay these fund members their money back when they retire. The biggest concern is that the pension funds are not achieving adequate returns in order to make sure that the money does not lose its value due to inflation or other factors. This research focuses on two parts. First of which is analysing the investments of five of the largest pension funds in Iceland over the years 2010 until 2019 and how the pension funds have been allocating their investment assets. The second purpose of the research is to examine whether a knowledgeable individual could achieve higher returns than the pension funds. Given the assumptions that the investor would be allowed to invest its own money instead of paying the premiums to a pension fund. The research finds that the pension funds have been investing efficiently and achieving good returns over the entire decade. Furthermore, the research shows that although the hypothetical investor is able to achieve decent returns, he is not able to beat the returns of the pension funds.

EducationsMSc in Finance and Investments, (Graduate Programme) Final Thesis
Publication date2020
Number of pages73