Record year for AP4 - Fund Capital increased to SEK 260 billion

AP4’s total return was 16.4% after expenses for 2013. AP4 posted its best ever earnings, overshooting SEK 37 billion. A strong reason for last year’s upbeat performance was opting for a high proportion of listed equities.

Fund capital increased to SEK 260 billion (230), and profit was SEK 37 billion (23).

  • Total return after expenses was 16.4% (11.2).
  • AP4 has generated annual nominal total return after expenses of 7.2% on average over 10 years, which in real terms (adjusted for inflation) equals 5.9% annually. This has overshot the Board’s real return requirement of 4.5% on average annually, and clearly outperformed the income index. Since the outset in 2001, real return has amounted to an average of 3.3% annually.
  • AP4’s active management outperformed the benchmark index by 0.5 (1.0) percentage points before expenses, equalling SEK 0.9 billion (1.8). It was the tenth consecutive six-month interim period in which the Fund’s active management outperformed the benchmark index, thus delivering a better return than passive management.
  • Management expenses remain low. The operating expense ratio, excluding commission expenses, was 0.08% (0.08) on an annualised basis. Including commission expenses, the ratio was 0.11% (0.10). Management expenses totalled SEK 227 million (218).
  • Foreign exchange exposure was 28.6% (27.7) at the close of the year.
  • In 2013, AP4 paid out a net amount of SEK 6.9 billion (3.9) from Fund capital to cover the deficit between outgoing and incoming payments in the pension system. In the last four years, AP4 has paid out a net amount of close to SEK 20 billion to the pension system.

- I’m delighted that AP4’s skilled asset managers have outperformed the index for the tenth consecutive six-month interim period. The contribution for the past five years is SEK 6.2 billion, which can be compared with an annual cost of about SEK 60 million to pursue active management, says Mats Andersson, CEO of AP4.

- An even more pleasing and relevant aspect is AP4’s solid long-term total return. In the past ten years, it has amounted to 7.2% annually on average, giving a real return of 5.9% annually, continues Mats Andersson.

- In 2013, AP4 further increased its greenhouse gas-efficient investments. This can be seen in light of the Fund’s wish to increase its strategic investments, with an investment horizon extending beyond three years, he adds.

 

The annual report can be downloaded at www.ap4.se.  

Published Friday, February 21, 2014