Sweden’s Alecta delivers best return in 20 years

Swedish pension provider, Alecta, has delivered its best return in 20 years securing a return of 20.3 per cent for its defined contribution pension product, Alecta Optimal Pension.

During the five-year period until December 31, 2019, Alecta Optimal Pension's total return was 7.7 percent on average per year. Managed capital in the total portfolio for Alecta Optimal Pension amounted to SEK 141bn at the end of 2019, compared to SEK 103bn at the end of 2018.

Its defined benefit scheme reported a return of 14.1 per cent. Alecta said rising stock markets around the world and a strong real estate market contributed to the strong return. Falling interest rates also contributed to its returns, Alecta said. Managed capital in the total portfolio for defined benefit insurance amounted to SEK 822bn at the end of the period.

Over the past five-year period, the average annual return has been 5.8 percent. In defined-benefit insurance, the collective consolidation amounted to 148 percent on December 31, 2019. During the year, Alecta’s board of directors increased the DB pension payments and earned pension entitlements by 1.45 per cent.

In 2019, Alecta made several major investments, including SEK 6.2bn in Heimstaden Bostad AB, with a further future commitment of SEK 7.5bn, SEK 0.8bn for a minority share in the unlisted Swedish internet pharmacy apotea.se and SEK 1bn in Africa's first social government bond.

In addition, the provider was certified by the Responsible Investors Alliance International’s ESG4Real initiative. It also joined an investment initiative - the Net-Zero Asset Owner Alliance (AOA) - with the common goal that the investment portfolios should be climate neutral by 2050.

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