SWEDEN – The roughly SEK180.2bn (€19.2bn) Fourth Swedish National Pension Fund, or AP4, has come under fire for underperforming its sister AP buffer funds in a review carried out by the Swedish Ministry of Finance.

This review is carried out on an annual basis, and the findings were released in a report in May.

“It is a fact that the return of AP4 has been lower than the returns for AP1, AP2 and AP3 respectively during the 2001 to 2005 period, which has meant less favourable comments for the AP4 in the review,” AP4 external mandates chief Tobias Fransson told IPE.

According to the review, AP4 achieved an average net return of 3.5% during the period 2001 to 2005. Meanwhile, AP1 achieved 4.3%, AP2 achieved 4.9% and AP3 attained 5%.

In 2005, AP4 achieved a 16.8% net return while AP1, AP2 and AP3 achieved 17.4%, 18.5% and 17.7% respectively. And in 2004, AP4 returned 10.5% compared to the other funds, which all achieved net returns above 11%.

“Since the Ministry of Finance, which conducted the review, is also the principal of the fund, AP4 declines to comment on the review because we do not wish to be interpreted as publicly criticising the review,” said Fransson.

AP4 managing director Thomas Halvorsen declined to comment.

In April, AP4 stated it was “likely” to use a passive rather than active approach to invest 3% of its assets in emerging market equities. The fund told IPE it has not yet invested in emerging market equities. Furthermore, the scheme would probably take an index approach.