Equities bring AP4 a strong first-half return
SWEDEN - Fjärde AP-fonden (AP4) the Fourth Swedish National Pension Fund, reported a gross first-half return of 7.9% as its 60% allocation to equities benefited from the recent stock market improvements.
Latest figures from the buffer fund showed the total value of the fund increased by SEK 11bn (€1.1bn) in the first six months of 2009 from SEK 164.7bn at the end of December to SEK 175.7bn, as it noted active management made a positive contribution of SEK 1.5bn to its result.
The best performance was achieved by the fund's holdings in Swedish equities, equivalent to 18.6% of scheme assets, with a return of 24.9%, while global equity investments returned 5.7%.
Fixed interest assets and active currency management also produced positive results of 0.9% and 0.1% respectively, although real estate returned a disappointing -3.5% and investments in unquoted stocks was the worst performer with a return of -4.6%.
At the end of June 2009 AP4's strategic asset allocation comprised 42% in global equities, 19% in Swedish equities, 34% in fixed interest, 4% in property and the remainder in unlisted shares.
The positive performance is in contrast to the -8.7% return reported in the same period in 2008, and AP4 showed over the last five years the average fund return is now 3.6%, although this represents an annual real rate of return of 2.1% - significantly below its target of 4%.
The full financial reports for 2009 will be published by AP4 on 18 February 2010.
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