19/2/2009
By Sophie Baker
Sweden's Första AP-fonden (AP1) pension fund has blamed falling equity markets for its SEK 47.2bn loss in 2008.
At the end of 2008, AP1 had net assets under management of SEK 171.6million. The fund's equity exposure at that point was 55 per cent, and foreign exchange exposure stood at 22 per cent.
Fixed income assets did little to soften the blow, with a return of 8.3 per cent, against the huge blow of equity
investment returns of -40.1 per cent.
The fund said that for the first time in five years, its active management was unable to outperform the strategic benchmark, although it has contributed an average of 0.3 percentage points to total return, which is equal to around SEK 500bn per year.
Johan Magnusson, managing director of Första AP-fonden, said: "We are clearly not satisfied
with this outcome. However, it should be seen in light of the very long-term nature of Första AP-fonden's mission. From a historical perspective the past year was extreme, with global equity markets plummeting by 40 per cent, and we have naturally not emerged unscathed from this situation. We are now taking steps to analyse and make use of experiences and lessons learned from the financial crisis."
At the beginning of 2009, the fund restructured its management model and mobilised around one the desire to boost total return through a stronger focus on strategic asset allocation.
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