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IPE special report May 2018

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Equities bring AP4 a strong first-half return

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  • 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.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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