Investment rules

The investment rules for AP1–AP4 are relatively flexible and permit investments in various asset classes. AP4 is mandated to act independently and, based on the investment rules, determine the allocation of assets for the long, medium and short terms. Management is governed by certain restrictions.

The Riksdag (the Swedish parliament), drew up new investment rules for AP1–AP4 in conjunction with the reorganisation of the funds. The rules came into effect on 1 January 2001 and are identical for each of the four funds.

The investment rules allow the funds to invest in most asset classes other than commodities. The restrictions are as follows:

• The funds may invest in all listed and transferable instruments traded in capital markets except commodity-based instruments.
• At least 30% of fund assets must be invested in fixed income securities with low credit and liquidity risk.
• A maximum of 40% of fund assets may be exposed to currency risk.
• A maximum of 10% of fund assets may be exposed to a single issuer or group of issuers that are interrelated.
• Holdings of equities issued by listed Swedish companies may not exceed 2% of total market capitalisation.
• The fund may own shares corresponding to no more than
  10% of voting rights in any single listed company.
• A maximum 5% of the assets may be placed in unlisted securities. These investments must take place indirectly through venture capital firms or similar.
• Shares and investments in real estate companies may be directly owned.
• At least 10% of fund assets must be managed by external asset managers.

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