AP7 has announced it is reducing the number of companies in its portfolio in response to “a conflict-ridden and unpredictable world”.
The Swedish pension fund said last week that current geopolitical and economic uncertainty had prompted a rethink of its strategy, including a move to a more active approach to asset selection.
“As the world becomes increasingly uncertain and unpredictable, active risk management is becoming an increasingly important capability,” said Lena Fahlén, AP7’s chief investment officer.#
In December 2025, the fund introduced a risk-based exclusion framework that went beyond its traditional norm-based screens and considered a broader set of investment management criteria.
Among companies captured by the new methodology are those “with particularly high and difficult-to-assess sustainability risks”, AP7 said at the time.
“Since then, global market conditions have become even more complex,” it wrote in a statement last week, meaning it now excludes some 600 constituents from its benchmark, the MSCI All Country World Index.
“With a more focused portfolio, we believe we can create the greatest value through active ownership and stewardship of the companies we actually own,” said Mikael Lindh Hök, a communications officer for AP7.
He added that, as a result of the spike in exclusions, “our portfolio has moved away from being a near-index portfolio, making our previous exclusion list less relevant”.
This has prompted the fund to stop publishing the exclusion list — a move that attracted criticism from civil society last week.
AP7 said it would continue to publish its full holdings as part of its annual and half-year reports, with the next update slated for August.
It also published its latest Climate Action Plan last week, in which it revealed it had pushed back the deadline for developing a “transition portfolio” representing 10% of its entire equity fund, from 2025 to 2027.
The decision was made to give AP7 more time to build up its internal expertise on the topic, in light of broader plans to manage more assets in-house.
AP7 already has a climate transition portfolio managed by Legal & General, but is in the process of developing an internal equivalent, focused on actively managed listed equities that can support global decarbonisation. The fund told IPE that the internal strategy wasn’t intended to replace L&G’s mandate.
The Climate Action Plan showed that AP7 achieved the rest of its 2025 climate targets, including a goal for half its corporate fixed income portfolio to be allocated to green bonds.
“We have now achieved these targets, some ahead of schedule, and are therefore adopting new targets for 2030,” it stated.
