AP4's fund capital increases to SEK 312 billion - a new record level

With a profit of SEK 5.7 billion, the Fourth Swedish National Pension Fund (AP4) increases fund capital to a record level of SEK 312 billion after net outflows of three billion kronor to the pension system. The total return for the first half of 2016 amounted to 1.9 after expenses.

– It is rewarding that AP4, with our long-term investment focus, delivers a positive total return despite stock market turmoil in connection with Brexit. Over the past ten years AP4 has generated an average return of 6.8 percent after expenses, which exceeds the income index by a wide margin and means that AP4 has positively contributed to the pension system, says Mats Andersson, CEO at AP4.

– AP4's low carbon investments account for 22 percent of the global equity portfolio and are long-term investments that reduce the climate risks of AP4’s assets. Additionally, we believe that a lower exposure to fossil resources will benefit AP4's long-term returns, continues Mats Andersson.

– We are also delighted that AP4's methods regarding management activities receives attention. AP4 has once again received awards for our efforts, says Mats Andersson.

  • Fund capital increased to SEK 312 billion (SEK 310 billion per 2015-12-31) and profits amounted to SEK 5.7 (18.0) billion. Over the past three years’ total profits amount to SEK 89 billion.
  • Total return after expenses amounted to 1.9 (6.1) percent. Total return before expenses amounted to 1.9 (6.1) percent.
  • Management costs continue to be low in both a domestic and international comparison. The management cost ratio to operating expenses amounted to 0.06 (0.07) percent; 0.10 (0.11) percent including commission costs.
  • Currency exposure amounted to 27.4 (27.8) percent at half year-end.
  • During the first half of 2016 AP4 paid a net contribution of SEK 3.2 (2.4) billions of fund capital to cover shortfalls between payments and receipts to the pension system. AP4 has paid in total close to SEK 33 billion from fund capital to the pension system since 2009 when the system's net flows became negative. Despite the outflows, AP4 has managed to increase fund capital from SEK 165 billion to SEK 312 billion during the same period.
YEAR IN BRIEF, KEY FIGURES Jan-Jun 2016 Jan-Jun 2015 Jan-Dec 2015
Fund capital, SEK bn 312.5 310.4 310.0
Net profit, SEK bn 5.6 18.0 20.1
Net disbursements to pension system, SEK bn -3.2 -2.4 -4.9
       
Total return after expenses 1.9 6.1 6.8
       
Operating expenses, % of AuM 0.06 0.07 0.06
Operating and commissions expenses, % of AuM 0.10 0.11 0.11
       
Annual total return after expenses, average 5 years, % 9.7 11.6 9.7
Annual total return after expenses, average 10 years, % 6.8 7.4 6.7
       

 

Mats Andersson will step down from his position at AP4 today, June 12, and he will be succeeded by Niklas Ekvall as CEO as of October 1, 2016. Per Colleen, Head of Equities at AP4, will serve as interim CEO until Niklas Ekvall assumes the position.

 

Stockholm July 12, 2016

AP4’s interim report can be found here.