Sweden’s AP2 today reported its highest-ever full-year return, having made 16.3% on investments in 2021, with Swedish and global equities being the main drivers behind the record return.

This level of return represents a bounce back for the Gothenburg-based national pension buffer fund, which last year posted much weaker returns than its three Stockholm-based peers – AP1, AP3 and AP4.

In last year’s results round from the four buffer funds in Sweden’s income pension system, AP2 had been an outlier with a 2020 return of just 3.5% after costs, compared to 9.7% for AP3, 9.6% for AP4 and 9.7% for AP1.

AP2 said this morning that the return corresponded to a profit of SEK62.3bn (€5.9bn) for the year, with total assets under management rising to SEK441bn from SEK386bn this time last year – after channelling SEK7.5bn into the pension system it exists to support.

Eva Halvarsson, the fund’s chief executive officer, said: “AP2’s profit of SEK62.3bn is the best ever reported by the fund. We have had a positive development in virtually all asset classes.”

She said AP2’s investment performance in 2021 was primarily attributable to Swedish and global equities.

“In addition, we can report a fantastic return of as much as 66.1% on our private equity investments,” Halvarsson said.

The fund’s 10-year average return now stood at 9.5%, she said, up from 7.7% in 2020, after the institution reduced management costs to “historically low levels”, now amounting to 0.11%, down from a figure of 0.14% the year before.

AP2 also published its sustainability report for the year, in which it revealed it had divested from around 250 coal, oil or gas firms in 2021 and achieved a 20% reduction in carbon emissions from its equity portfolio.

The pension fund’s long-standing chief investment officer Hans Fahlin is set to leave this month, and will be replaced by incoming investment chief Erik Kleväng Callert, who was appointed in December.

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