SWEDEN – The Third Swedish National Pension Fund, AP3, outperformed its strategic benchmark portfolio by 0.2% last year, despite seeing total returns on its investments drop by 4.4%, which it blames on the sharp downturn in the stock markets last year.
The fund’s benchmark portfolio, made up of various FTSE equity and Merrill Lynch bond indices slid back 4.6% overall. The Swedish equities portfolio showed the best performance, outdoing its index by 3.4%.
Nonetheless, the income the fund derives from asset management declined, with overall returns down 4.2%. The fund’s value stood at SKr132.8bn (€14.5bn) at the end of the year, including SKr4.5bn in pensions contributions.
Accordingly and to prevent further loss, the fund undertook a review of its asset allocation strategy and decided for 2002 to raise the equities portion of its central reference portfolio by 5.5%, the real estate exposure by 1% and the index-linked bonds element by 0.5%.
Says Tomas Nicolin, AP3 chief executive officer: “In light of the turbulent market developments and the fact that the fund’s operations during the first half of 2001 focused on the extensive task of adjusting the portfolio to our new asset management mandate, I believe that last year’s performance is satisfactory.”