A dramatic year with major financial turbulence

Press release

24 February 2023

2022 was characterised by financial turbulence with rapidly rising interest rates and sharply falling values for most asset classes. The Fourth Swedish National Pension Fund’s (AP4’s) return for the full year 2022 was SEK -11.9% after costs, and the net result for the year was SEK -62.5 billion. After a net transfer of SEK 4.7 billion to the pension system during the year, fund capital amounted to SEK 460.5 billion at year-end 2022. The portfolio’s CO2 emissions decreased by 3% in 2022, and the CO2 emissions have decreased by 61% since 2010. AP4 takes its responsibility as an owner and served on 46 nomination committees during 2022.

“In this context it is important to note that AP4 is a very long-term investor. Measured over a slightly longer time perspective, including 2021, AP4’s portfolio has generated a positive result of more than SEK 23 billion. If we stretch out the time horizon, to five and ten years, which is more relevant for a long-term investor like AP4, we can report favourable annualised portfolio returns of 6.9% and 9.2%, respectively,” comments Niklas Ekvall, CEO of AP4.

“AP4’s work on managing climate risks in the investment portfolio continue to generate results over time. During 2022, the portfolio’s CO₂ emissions decreased by further 3%. Since 2010 this decrease measures a full 61%. AP4 continuously analyses sustainability trends and actively searches for investments that it deems will contribute to and benefit from the transition to a sustainable society. During 2022, AP4 made new thematic sustainability investments amounting to SEK 7.4 billion.

“AP4’s cost level for 2022 was 0.08% of managed assets. AP4 strives to conduct as cost-efficient pension management as possible, and in an international cost comparison, AP4’s level of costs was nearly half that of corresponding pension funds internationally.

“During the year, AP4 continued its long-term work on continuously developing its operations with the ambition to always be at the forefront. The fact that this is generating results has been confirmed as we received the prestigious European Pension Fund of the Year award at the award ceremony that is held every year by Investment & Pensions Europe (IPE),” concludes Niklas Ekvall.

Ney ratios for AP4’s operations	2022	2021
Fund capital at end of period, SEK bn	460.5	527.6
Net result for the year, SEK bn	-62.5	85.7
Net flow to national pension system, SEK bn	-4.7	-7.5
Fund capital at start of period, SEK bn	527.6	449.4
Asset management costs, operating expenses, %	0.05	0.05
Asset management costs, commission expenses, %	0.03	0.03
Total asset management costs, %	0.08	0.08
Return after costs, %	-11.9	19.2
Active return before costs, %	-3.8	3.5
Annualised return after costs, 5 years, %	6.9	11.6
Annualised return after costs, 10 years, %	9.2	11.8