AMF, one of Sweden’s largest pensions providers, has argued in its interim report that today’s challenges – including uncertainty over the long-term effects of the COVID-19 outbreak – mean traditional guaranteed pensions are still better than other types of saving.
Johan Sidenmark, chief executive officer of the blue-collar pension scheme, said: “Uncertainty about the pandemic’s long-term effects remains high, global indebtedness has been overshadowed by crisis management, and the challenges we focused on before the pandemic – such as the low interest rate situation, high asset valuations and geopolitical tensions – remain.
“Not least in this light, traditional pension insurance, with a guarantee at its base and with a clear focus on the long-term and risk diversification, continues to have a clear lead compared with many other forms of savings,” he said.
AMF’s main scheme is a traditional with-profits guaranteed plan, though it also has a unit-link pensions and investment subsidiary, AMF Fonder.
From a financial perspective, the pension fund’s CEO said the market had fought back after the spring collapse.
“The stock market is on the plus side, and important Swedish companies have recently issued reverse profit warnings,” he said, adding that while these signs were good for AMF’s savers, it was too early to relax.
AMF reported a total return of 2.2% for January to September, up from the 1.4% loss it reported for the first half of this year.
The group’s total assets rose to SEK685bn (€66.4bn) at the end of September, from SEK655bn 12 months before, with SEK158bn of this attributable to AMF Fonder and the bulk, SEK527bn, being managed by its parent company, which runs the traditional scheme.
Tomas Flodén, the pension fund’s CIO, said fixed income had been the strongest performing asset class in the reporting period, closely followed by Swedish shares.
He said he was pleased with how AMF had coped in the turbulent reporting period.
“We have adapted our portfolio to the market situation to create security for our savers, supported important investee companies in need of capital and at the same time, thanks to our long-term perspective and our strong financial position, been able to continue our strategic transformation, and invested in more unlisted companies,” Flodén said.