SWEDEN – The fourth national pension fund Fjarde AP-fonden, or AP4, says its performance against its benchmark in the first half of the year was “unsatisfactory”.

AP4 said its return in the January-June period was 6.7%, taking its assets at the end of the period to 123 billion Swedish crowns (13.3 billion euros).

“It is gratifying to note the fund has reported its strongest half-year figures in absolute terms since the remodelling of the National Pension Scheme at the end of 2000,” said AP4 president Thomas Halvorsen, citing rising world equity prices.

“However, the fund’s return of 6.7% relative to 7.2% for the benchmark index is unsatisfactory, even though the fact that much of the underperformance stemmed from a negative return on unlisted assets.”

The return was mainly hit by the change in the value of shares in real estate firm AP Fastigheter, AP4 said.

Sister fund AP1 has already disclosed that it returned 6.6% in the first six months, while AP3 returned 6.9%.

AP4 said that its Swedish equity portfolio, which accounts for 20% of its overall holdings, returned 10.7% in the period. Thirty-eight percent of AP4’s 24.9 billion crown Swedish equity portfolio is in five companies: Hennes & Mauritz, Nordea, Ericsson, SHB and AstraZeneca.

Global equities, which account for 42.5% of the fund’s total portfolio, are mostly passively managed. The return on global equities was 2.0%, a 0.3 percentage-point underperformance against the benchmark.

The 41.6 billion crown fixed income portfolio, 37.5% of the overall portfolio, returned 4.2%.

AP4 said it made a net profit of 7.6 billion crowns in the period, compared to a 13.8 billion loss in the prior year period.