Sweden’s Seventh AP Fund (AP7) returned -9.5 per cent in 2022, down from a positive return of 32 per cent in 2021, its annual report has revealed.

The fund noted that 2022 was a turbulent year for the stock market, which had impacted its return last year.

AP7 CEO, Richard Gröttheim, writing his last words as CEO after 12 years in the role, said that the corrections on the world’s stock markets after several years of strong growth could, to some extent, be seen as healthy.

“When we entered 2022, AP7's growth had averaged 15 percent per year since 2010, when AP7 Såfa was created,” he stated.

“I already stated in my CEO speech last year that we cannot expect an annual return at these levels in the long term.”

Despite the negative return, Gröttheim noted that the pension fund’s diversification strategy had been successful during the chaotic year, especially its currency diversification where the improvement in the value of the US dollar had offset some of the negative stock market development.

On average since 2000, the capital-weighted return for AP7 was 9.8 per cent, a level that it said had exceeded the long term goal of providing at least a 2 per cent increase in value per year above the income pension, which amounted to 3.3 per cent.

AP7’s report also detailed the sustainability goals for the pension fund, noting that the largest sweeping change was the implementation of its climate action plan to help achieve net-zero carbon emissions.

The report contained several activities and goals for the future, but also detailed that some of the results of the strategy could already be seen this year.

During 2022, AP7 voted at more than 4,000 general meetings and tightened its voting policy for companies within the Climate Action 100+ initiative.

Commenting on his departure from the fund after 22 years, Gröttheim said: “After 22 years at AP7, 12 of which as CEO, it is time for a new chapter in my life.

“I look back proudly on all the years where we created a good return for many of Sweden's premium pension savers and were driving ESG on a global level as a universal owner.”

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