SWEDEN – The 151.9 billion-crown (16.5 billion-euro) Swedish buffer fund Tredje AP-fonden, whose new chief executive Kerstin Hessius joins next week, says it made a 5.7% return on its investments in the first half.
“The Third Swedish National Pension Fund (AP3) posted a net profit of 8.2 billion crowns in the first half of 2004, equivalent to a total return of 5.7%,” AP3 said.
It said that as at June 30 its market value was 151.9 billion crowns - an increase, including capital inflows, of 9.4 billion crowns.
It added: “The Fund’s currency risk at June 30 amounted to 19.3% of the total portfolio, compared to 9.0% at the start of the year.”
“The increase reflects the Board’s decision to increase the level of currency exposure in the Fund’s reference portfolio.”
The best performing assets were Swedish and Japanese equities, US corporate bonds, and index-linked bonds.
“In the equity markets, small and medium sized stocks performed best. AP3’s private equity investments also generated strong returns in the form of distributed capital gains.”
“Thanks to our strategy of holding a broad mix of assets, AP3 has been in a strong position to benefit from market trends,” said acting chief executive Sven Askenberger.
The fund added that during the spring it “took several new steps towards more active fund management and an even broader portfolio in order to increase returns and improve risk diversification”.
It introduced new external asset management mandates for US and European small-cap companies. This resulted in an increase in the number of companies in which the Fund invests from 1,500 to close to 6,000.
AP3 named Hessius, president of the Stockholm stock exchange, as the replacement for former CEO Tomas Nicolin in April.