Asset management goals

Based on AP4's mission, the following overarching asset management objectives have been determined:

Medarbetare på AP4

  • Long-term real return target of 4 % per year over a 40 year time horizon. This target indicates the return required for AP4 in the 40-year term to fulfill the mission of the pension system with balanced risk.

  • Medium-term real return target of 3 % per year over a 10 year time horizon. The target is based on an analysis of market conditions from a medium-term perspective for the various asset classes included in the portfolio. The goal is complemented by a medium-term allocation portfolio that serves as a reference for the AP4's operational day-to-day asset management.

  • An active return target amounting to 1 % per year on average over a rolling 5-year time horizon in addition to the return on the reference portfolio determined in the medium-term perspective.

In view of the fact that the income pension system today has a more robust financial position today than at its start in 2001,combined with an expectation for lower returns going forward, ahead of 2018 we have revised the Fund’s return targets. The very long-term target (40 years) has been revised downward from a 4.5 % real return on an annualised basis to 4 %. Owing to the low expected return during the coming ten-year period, we have also complemented the long-term target with a medium-term target of an average 3 % real return on an annualised basis for the coming ten-year period. We regard these new targets as ambitious, and achieving them will require adept asset management by AP4.