Asset management goals

AP4 has two different targets for evaluating the portfolio’s return. One is the portfolio’s real (inflation-adjusted) return target of 3% per year on average, and the other is the operative management’s active return target of 1% per year relative to a benchmark portfolio.

Real return target

AP4's real return target is 3% per year on average over a medium-term perspective of 10 years. At the same time, AP4 estimates that it is possible to achieve a real return of an average of 3.5% in real terms over 40 years per year. Since the start of the pension scheme in 2001, AP4's average annual return after costs has been 6.7% in nominal terms, exceeding the long-term target of an average of 5.6% per year (real return target calculated with inflation). In real terms, AP4's average annual return has been 5.1%  and the long-term target averaged 4.3% year. The return has also by a good margin surpassed the development of the income index of an average of 2.9% per year, which means that AP4 has contributed to the stability of the pension system.

Active return target

The active return of operational management is evaluated in relation to the reference portfolio established by the Board of Directors, the Dynamic Normal Portfolio (DNP). AP4's active return was 2.4 percentage points higher than the benchmark index in 2020, which means added value in the administration of SEK 10.1 billion in 2020. Measured over the five-year evaluation horizon, the active return averaged 1.8 percentage points per year, exceeding the active return target of 1.1 percentage points per year. AP4's active return has in total made an active profit contribution of SEK 30.8 billion over the past five years.