SWEDEN – The 16 billion-euro Swedish buffer fund Första AP-fonden returned 5.5% in the first half of 2004 - on par with its strategic index - boosted by a 17% return on Swedish equities.

The fund had a net investment income of 7.7 billion crowns (800 million euros). “This value growth is attributable to rising share prices, particularly on the Stockholm Stock Exchange,” AP1 said in a release.

“Despite uncertainty caused by rising interest rates and high oil prices, the previous year’s positive earnings trend held throughout the first half of 2004,” said managing director William af Sandeberg.

He added: “The Fund’s net assets now amount to 148.1 billion crowns, which is close to one billion more than the pension capital Första AP-fonden has received since starting operations in 2001.”

“In 2004 this result was achieved primarily thanks to strong development for Swedish equities, which showed a return of over 17%.” AP1’s sister fund AP2 yesterday said its Swedish equities returned 11.8% in the first half, 1.1% below benchmark.

AP1, which raised its currency exposure in the strategic benchmark from 15% to 20% in the first quarter, said its management costs rose to 115 million crowns from 83 million crowns before.

It said: “The increased cost is mainly explained by a higher number of external asset managers, although these contributed to a higher return during the period.”

Sister fund AP3 is set to announce its first-half returns on August 24.