SWEDEN – Both AP1 and AP3 say they returned 11.4% on their investments in 2004.

“Första AP-fonden’s net investment income for 2004 reached SEK15.9bn (€1.74bn), representing a total return of 11.4%,” AP1 said.

It said the growth was mainly attributable to a “high proportion of equities, rising share prices and falling interest rates”. The net asset value at the end of 2004 was SEK156.8bn.

“It is highly gratifying for the Swedish pension system to see that the previous year’s positive earnings trend for the AP Funds continued in 2004,” said AP1 managing director William af Sandeberg.

“Första AP-fonden’s net investment income of SEK15.9bn represents an increase of over SEK9bn in net asset value since the Swedish pension system reform 2001.”

Meanwhile, sister fund AP3, Tredje AP-fonden, said: “Equity market gains and lower long-term interest rates had a favourable effect on AP3’s fund capital in 2004. Swedish equities were the best-performing asset category, posting a return of 20.1%.”

Its capital rose SEK17.8bn and totalled SEK160.3bn at year-end.

“The Fund generated a high and stable return in 2004 due to a good portfolio structure,” said chief executive Kerstin Hessius. “Market trends were favourable and the decline in capital sustained in 2001 and 2002 has now been recouped. Fund assets have risen SEK12.5bn in value, excluding net inflows, since AP3 was founded."

Last week sister schemes AP2 and AP4 said they returned 11.6% and 10.6% respectively in 2004.