AP4's fund capital increases to SEK 348 billion

With a positive result of almost SEK 17 billion, the Fourth Swedish National Pension Fund (AP4) fund capital increased to SEK 348 billion - a new record level. The return for the first six months amounted to 5.2 percent after costs. Over the past ten years, AP4 has returned 88 percent after costs, which equates to an average annual return of 6.5 percent.

AP4's real return, adjusted for inflation, amounts to an average of 5.4 percent per year over a ten-year period. This exceeds the long-term real return target of 4.5 percent. Since the start of the pension system in 2001, the long-term target is exceeded by an annual average real return of 4.7 percent.

- It is gratifying that AP4 over time has contributed positively to the financial strength of the pension system and that we have generated a long-term return that outperforms a tough target in real terms, says Niklas Ekvall, CEO of AP4.

- AP4 continues to focus on sustainability in the investments – an ongoing work that is constantly evolving. Our ambition is to further broaden and integrate the analysis of sustainability aspects as part of our investment process, both in terms of risks and business opportunities. Our low-carbon strategies, which reduce the climate risk in the assets, has now increased to 27 percent of the global equity portfolio with a target to reach 30 percent by the end of 2017, concludes Niklas Ekvall.

YEAR IN BRIEF, KEY FIGURES June 30  2017 June 30 2016 Dec 31 2016
Fund capital at June 30, 2017, SEK bn  347.6 312.5  333.9
Net profit, SEK bn  17.3 5.6  30.5
Net disbursements to pension system, SEK bn  -3.7 -3.2  -6.6
Fund capital at January 1, 2017, SEK bn  333.9  310.0  310.0
       
Expense ratio, operating expenses %  0.06  0.06  0.06
Expense ratio, commission fees %  0.04  0.04  0.04
Total expense ratio, %  0.10  0.10  0.10
       
Return after expenses, %  5.2 1.9  10.0
Real return after expenses, %  4.5  1.1  8.3
       
Annual total return after expenses, average 5 years, %  11,8 9.7  12.0
Annual total return after expenses, average 10 years, %  6,5 6.8  6.7
       
Real annualized return after expenses, 10.0 years, %  5,4 5.7 5.5

 

  • Fund capital increased to SEK 347.6 billion (312.5) and profit after costs amounted to SEK 17.3 billion (5.6 billion).
  • Return after expenses was 5.2 (1.9) percent.
  • Management expenses remained low, both in domestic and international comparisons. The management cost ratio for operating expenses amounted to 0.06 (0.06) percent. Including commission costs, the ratio amounted to 0.10 (0.10) percent.
  • Currency exposure amounted to 27.9 (27.4) percent at the end of the period.
  • During the first half of 2017, AP4 paid out SEK 3.7 (3.2) billion net of fund capital to help cover the deficit between pension contributions paid out and pension contributions paid in to the pension system. Overall, since 2009, when the system's net flow became negative, AP4 has paid out SEK 40 billion from fund capital to the pension system.

 

AP4s Interim Report 2017 can be read and retrieved at www.ap4.se. 

For more information, please contact:
Niklas Ekvall, CEO AP4, tel: +468-787 75 51
Tobias Fransson, Chief of Strategy and Sustainability, tel: +468-787 75 28