Real estate holdings boost 2015 returns at Sweden's AP4
AP4 returned 6.8% over the course of 2015, boosted by strong results from its real estate and Swedish equity holdings.
Chief executive Mats Andersson said it was “gratifying” the fund was delivering good long-term returns, noting its 10-year average performance of 6.7% before inflation.
AP4’s direct property holdings, which accounted for 6.6% of its portfolio, saw by far the strongest results, returning 32%, followed by a 14% return from its Swedish equity holdings.
However, due to weaker returns on its global equity holdings, the fund’s equity portfolio overall returned 5.5%, behind an 11.3% return from alternatives.
Its fixed income holdings, accounting for more than one-third of all SEK310bn (€33.8bn) in assets, saw losses of 0.1%, one of two asset classes to see losses over the course of the year.
Andersson took pains to emphasise that AP4’s portfolio had once again outperformed its benchmark.
“AP4’s experienced managers have outperformed the index for the seventh consecutive year,” he said.
“Over the past seven years, the contribution [from active management] has amounted to nearly SEK8bn, which can be set against an annual cost to pursue active management of approximately SEK100m.”
During 2015, the percentage of actively managed assets rose to 70%, while externally managed assets were down from 31% to 29%.
Its performance in 2015 was slightly behind fellow buffer fund AP3, and asserts under management remained stagnant compared with its 2015 half-yearly results.