Sweden’s AP4 reports return of -2.5% in H1 2020

The Fourth Swedish National Pension Fund (AP4) has revealed that its return for the first six months of 2020 totalled -2.5 per cent.

Its total fund capital, as of 30 June 2020, amounted to SEK 403.2bn, down from SEK 418bn at the start of the year.

However, this was an increase from 30 June 2019, when AP4’s fund capital stood at SEK 391.4bn.

The net result for the first half of 2020 was SEK -10.6bn, compared to SEK 75.2bn at the start of the year.

During H1 2020, net payments from AP4 to the pension system totalled SEK 4.2bn, while the portfolio’s active return during this period was -0.7 percentage points lower than AP4’s benchmark portfolio.

Currency exposure was 19.7 per cent of fund capital, as of 30 June.

AP4 CEO, Niklas Ekvall, commented that although and negative return “never feels satisfactory”, AP4’s performance in H1 2020 “can still be regarded as a passing grade” due to the way it dealt with the turbulent market.

“AP4 has acted as a long-term and responsible owner in this extremely difficult and uncertain situation,” he continued.

“This has been done, among other ways, by engaging in proactive dialogues with companies and with owner groupings on companies’ need for capital, which has resulted in AP4’s participation in several new share issues to support companies with sound long-term business models.

“AP4 is also contributing to the establishment of an investment company whose purpose is to support primarily unlisted, medium-sized Swedish companies in the current situation.

“AP4 also saw an opportunity as a long-term investor to increase our investments in corporate bonds issued by quality companies that structurally benefit – or at least are not put to a disadvantage – from the long-term impacts of the Covid-19 crisis.”

Total costs indexed on a full-year basis amounted to 0.09 per cent of average assets under management. AP4 said that its cost level is just under half compared with corresponding pension funds in an international comparison.

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