SWEDEN- Sweden’s AP4 fund underperformed its benchmark during 2001 by 0.5% with an overall return of –5%. Chief executive Thomas Halvorsen says extensive restructuring of the fund’s investments made it difficult to outperform the index.

At the creation of the AP4 fund at the end of 2000, it allocated 30% to equities and 70% to fixed income. But in the last year it has undergone a radical change resulting in 63% of the fund being placed in equities, 34% in fixed income and 3% in unlisted property.

At the beginning of 2001, the fund had 2.7% in global equities, a figure that had risen to 39% at the end of the year. The fund has also cut exposure to Swedish equities, down from 3.1% to 1.1% in 2001.

“These changes have made great demands on the fund’s asset management. This year has been characterised as a year of change and adaptation for the Fourth AP fund,” says the annual report.

Returns on the global equity portfolio minus currency hedging were –10.6%, an underperformance of 2.9%. The annual report puts this down to poor stock selection during the second half of the year. Returns from Swedish equities were –12.7% compared with an index figure of -14.8%.