SWEDEN – Buffer fund Första AP-fonden returned 17.5% on its investments in 2005, 1.5% above benchmark, taking its net assets to SEK187.3bn (€20bn).

The fund’s bet assets rose by SEK30.5bn and net investment income reached SEK27.6bn.

It said the result was its best performance to date and was mainly attributable to a “sustained high proportion of equities, rising stock prices and positive returns from active management”.

“Our positioning was highly successful and made a substantial net contribution to the pension system,” said
managing director William af Sandeberg.

“The fund’s total return exceeded benchmark by 1.5%, corresponding to approximately SEK2.3bn in investment earnings.”

AP1 said that virtually every part of its management added to the strong active return, with internal strategic and tactical asset allocation, foreign exchange management and Swedish equities all outperforming their benchmarks.

The same applied to externally managed portfolios. There was a net inflow of SEK2.3bn from the pension system.

AP1’s 34% fixed income exposure was below that for the strategic benchmark, while the 59% exposure to equities and 21% in foreign exchange was somewhat higher.

“Our excellent performance in the past three years has provided a valuable reinforcement to the Swedish pension system,” af Sandeberg said.

“After five years in operation it is satisfying to note that the fund has achieved an average annualized return of 4.4% and, together with the other buffer funds, has delivered substantial value growth.”