SWEDEN - AP4, the Swedish buffer fund AP4 that is getting a new chief executive, has reported first-half returns 0.8% - 0.5 percentage points below benchmark.
The result is the worst benchmark-relative performance so far of the five AP funds that have reported first-half figures. AP1 managed a positive relative return of 0.1 points, while AP3 and AP2 fared less well (0.0 and -0.1 respectively).
At year-end 2005 AP4's portfolio had already missed its benchmark by 0.1 percentage points.
Earlier this year AP4 came under fire from the Swedish Ministry of Finance for continuously underperforming its sister buffer funds over the last four years.
The 0.8% investment return compares to an 8.3% return in the same period of 2005. Real estate, returning 19.3%, and Swedish equities, returning 4.3%, saved the returns from turning out negative.
The global equity portfolio returned 1.2% and fixed income assets -1.8%. Net income was further cut by a negative contribution of currency management, i.e. SEK-1m (compared to a positive net income of SEK 3.6m in 2005).
Total net profit was down to SEK1.4bn from SEK 12.5bn last year.
Total investment assets came up to SEK182.3bn (€19.7bn) up SEK16.6bn from the same period last year. The strategic portfolio's composition at the end of June was 41.5% global equities, 18.8% Swedish equities, 37.8% fixed income and 1.9% real estate.
Externally managed assets accounted for 17.9% of the total portfolio.
In July AP4 said retiring managing director Thomas Halvorsen would be replaced by Skandia Life chief investment officer Mats Andersson.