AP4’s total return was just over 11% in 2012. The positive outcome made a contribution of SEK 23 billion to the pension system, of which SEK 1.8 billion was generated by AP4’s active management. It was the fourth consecutive year in which AP4’s active management outperformed the benchmark index, thus delivering a better return than passive management. Fund capital increased to SEK 230 billion.
- Fund capital totalled SEK 230 billion (210) at the end of 2012. During the year, AP4 paid out a net amount of SEK 3.8 billion (1.2) to the pension system from Fund capital.
- Total return after expenses was 11.2% (-0.7). Total return before expenses was 11.3% (-0.7). AP4 benefited from its high proportion of equities and the upbeat performance of equity markets globally, including in Sweden.
- AP4’s real (inflation-adjusted) return over a ten-year period was 5.8% annually on average. Thus, the long-term target of 4.5% average real return set by the Board was overshot.
- Active management outperformed the benchmark by 1.0 percentage points (0.2) before expenses. This equals SEK 1.8 billion (0.4). It was the fourth consecutive year in which AP4’s active management outperformed the benchmark index, thus delivering a better return than passive management. The management also overshot the active return target set by the Board.
- Net profit for the year totalled SEK 23.4 billion (-1.6).
- Management expenses were SEK 179 million (179), which equates to an operating expense ratio of 0.082% (0.084). Including commission expenses, the figure was 0.099% (0.095).
“We are delighted that AP4’s active management delivered a net profit for the fourth consecutive year. The contribution for year was SEK 1.8 billion. On the whole, AP4 has contributed just over SEK 5.5 billion in active earnings since the management was reorganised four years ago,” says Mats Andersson, CEO of AP4.
“An even more pleasing and relevant aspect is that AP4’s total return overshot the Board’s long-term target. In the last ten years, the Fund’s real return, that is return adjusted for inflation, has reached 5.8% annually, which can be compared with the target set by the Board of 4.5% annually,” continues Mats Andersson.
Stockholm, 20 February 2013
AP4’s 2012 annual report in English is available on the Fund's web site 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.