SWEDEN - Fjärde AP-fonden, the fourth Swedish buffer fund, returned 5.5% in the first half of 2004 - weighed down by an “unsatisfactory” performance of its Swedish equities portfolio.
“The return on the fund’s total assets during the period amounted to 5.5%, which was marginally higher than the benchmark index,” AP4 said in a release.
AP4 said Swedish equities returned 10.8% - compared to a benchmark return of 12.3% - due to the portfolio lacking exposure to the information technology sector. “The positions taken by the fund on the Swedish equity market generated an unsatisfactory return in the short run,” said president Thomas Halvorsen.
Global equities and fixed income returned 8.7% and 2.3% - compared to benchmark returns of 8.1% and 1.6% respectively. Real estate’s return of 8.7% was on a par with benchmark.
The market value of AP4’s assets rose to 144.2 billion crowns (15.8 billion euros) at the end of June, up from 135.6 billion crowns at the start of the year. Its net market value profit fell 3.9% to 7.4 billion crowns from 7.7 billion crowns in the same period in 2003.
“After a weak start to the year our asset management returns have steadily improved relative to the index,” Halvorsen said. “Our performance in fixed income asset management relative to the index is highly satisfactory, not just in the period in question by over the longer term too.”
The fund changed its strategic portfolio at the end of 2003 to include a two percent weighting to real estate. The move meant that Swedish equities’ weight dropped to 19% and global equities’ was down to 42%. Fixed income fell to 37%.
“Some 19.1% of assets were subject to currency exposure, compared to 18.5% at the start of the year,” it said.