Fjärde AP-fondens, the Fourth Swedish National Pension Fund (AP4), has announced record earnings of more than SEK37bn (€4.1bn) for calendar year 2013, a total return of 16.4% after expenses.
This compares with a total return of 11.2% for 2012.
The fund is now worth SEK260bn.
AP4’s brief is the achieve the best possible return over time, and its board considers this is best approached by holding a large proportion of publicly quoted equities, both Swedish and non-Swedish.
The fund said this strategy had been a large component in the outperformance for 2013.
Another factor was the emphasis on active management.
The fund outperformed the benchmark index by 0.5 percentage points before expenses, although last year the outperformance had been 1%.
AP4 has now outperformed its benchmark index for a tenth consecutive six-month interim period, which means it has delivered a better return than passive management.
The return for 2013 takes the annual nominal total return after expenses over the past 10 years to 7.2%, or 5.9% adjusted for inflation.
This comfortably overshoots the board’s real return requirement of 4.5% on average, and has also outperformed the income index.
Meanwhile, management expenses remain low, with a total expense ratio of 0.11%, slightly above last year’s 0.10%.
Foreign exchange exposure has slightly increased over last year, reaching 28.6% as at 31 December 2013.