The Fourth Swedish National Pension Fund (AP4)

A strong six months

Press Release   •   Aug 22, 2012 11:57 GMT

AP4’s total return was 5.8% for the period January – June 2012. Fund capital increased to just over SEK 220 billion. The Fund’s active management outperformed the benchmark indexes by over 0.8 percentage points, contributing SEK 1.6 billion to the return.

  • Fund capital totalled SEK 220.5 billion (216.3) at 30 June 2012, up SEK 10.5 billion (3.4) in the first six months.
  • AP4’s profit for the period was SEK 12.2 billion (3.6).
  • Total return after expenses was 5.8% (1.6) in the first six months.
  • Active return, that is, the return exceeding the benchmark index, was 0.8 (0.1) percentage points. This corresponded to a contribution of SEK 1.6 billion (0.2).
  • Expenses totalled SEK 110 billion (108), which equalled an operating expense ratio of 0.10% (0.10) on an annualised basis.
  • Over a ten-year period, total return after expenses outperformed the income index by a margin. Total return reached 5.8% annually on average, thus outperforming the income index, which increased 3.4% annually on average in the same period. The Fund thus contributed positively to the stability of the pension system.
  • Real total return after expenses (inflation-adjusted) reached just over 4.4% (2.6) annually on average over a ten-year period. The target set by the board is 4.5% annually on average over a ten-year period.
  • At 30 June, foreign currency exposure was 27% (25).
  • Net payments to the pension system totalled SEK 1.7 billion (0.2) for the period.

“Earnings for the first six months were strong. It’s good news that all management units outperformed their benchmark indexes,” says Mats Andersson, CEO of AP4.

“In the last three years, the contribution exceeding the index from the active management has amounted to close to SEK 4 billion. The internal target has been exceeded by a margin,” adds Mats Andersson.

“An even more pleasing and relevant aspect is that the Fund’s total return in the past ten years is on a par with the board's long-term target. In the last ten years, the Fund’s real return, that is return adjusted for inflation, has reached close to 4.5% annually, which can be compared with the target set by the board of precisely 4.5% annually,” concludes Mats Andersson.

Stockholm, 22 August 2012

AP4’s complete interim report for the period 1 January – 30 June 2012 is available on the Fund’s website, www.ap4.se.

The Fourth Swedish National Pension Fund (AP4) is a government agency. AP4's brief is to manage Fund capital for the best possible return over time and thus support the stability of the pension system.