AP4 sees 6% returns boosted by weakening Swedish krone
SWEDEN – Buffer fund AP4 has seen returns of over 6% in the first six months of the year, as the SEK241bn (€27.6bn) fund benefitted from the strong performance of domestic and global equity.
The 6.3% return saw assets under management increase by SEK14bn, far ahead of the SEK3.1bn in outflows the fund was forced to make over the first six months of the year.
Mats Andersson, chief executive of AP4, welcomed that the fund once more also outperformed its target benchmark – albeit only by 0.1 percentage point for the period, down from the 0.8 percentage point outperformance for the first six months of 2012.
"An even more pleasing and relevant aspect is AP4's solid long-term total return," he added.
"In the past 10 years, it has amounted to 7.2% annually on average, giving a real return – that is, adjusted for inflation – of 5.9% annually," Andersson said, noting the return was above the board's 4.5% target.
In the half-yearly report, the fund noted that the strengthening of both dollar and euro over the Swedish krone had "contributed positively" to returns within the fund's normal portfolio – two-thirds of which consisted equity holdings.
It noted that despite the strong returns from Japanese equity, an estimated 20% return when measured in yen, the returns increased to nearly 30% when measured in krone.
The fund also said that management expenses remained low, with operating expenses, excluding commission, falling by 0.01 percentage points to 0.07% at the end of June.