The Fourth Swedish National Pension Fund (AP4)

AP4 overshot targets and Fund Capital rose to SEK 241 billion

Press Release   •   Aug 22, 2013 15:46 GMT

AP4’s total return was 6.3%, contributing over SEK 14 billion to profit for the period January–June 2013. AP4 benefited from its high proportion of equities in the upbeat performance of equity markets in Sweden and around the world.

  • Fund capital increased to SEK 240.9 billion (220.5), and profit for the first six months was SEK 14.4 billion (12.2).
  • Total return both before and after expenses was 6.3% (5.8).
  • AP4 has generated annual nominal total return after expenses of 7.2% on average over 10 years, which in real terms (adjusted for inflation) equals 5.9% annually. This has overshot the Board’s real return requirement of 4.5% on average annually, and outperformed the income index.
  • AP4’s active management outperformed the benchmark index by 0.1 (0.8) percentage points before expenses, equalling SEK 0.3 billion (1.6). It was the ninth consecutive six-month interim period in which the Fund’s active management outperformed the benchmark index, thus delivering a better return than passive management.
  • Management expenses remain low. The operating expense ratio, excluding commission expenses, was 0.07% (0.08) on an annualised basis. Including commission expenses, the ratio was 0.11% (0.10). Management expenses totalled SEK 127 million (110).
  • Foreign exchange exposure was 28.6% (27.4) at the end of June.
  • During the January–June period, AP4 paid out a net amount of SEK 3.1 billion (1.7) to the pension system from Fund capital.

“We are very pleased that AP4’s active management has outperformed the index for the ninth consecutive six-month interim period, especially since this was the first half-year period with the new management structure in place,” says Mats Andersson, CEO of AP4.

“An even more pleasing and relevant aspect is AP4’s solid long-term total return. In the past ten years, it has amounted to 7.2% annually on average, giving a real return (that is, adjusted for inflation) of 5.9% annually. This is above the Board’s long-term target of 4.5% annually,” adds Mats Andersson.

Stockholm, 22 August 2013

AP4’s January–June 2013 report is available at 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.