A diversified portfolio
As per June, 2021 AP4's fund capital was SEK 489.8 billion. More than half of these assets were invested in Swedish and global equities. Every three years AP4 conducts a long-term analysis (a so-called ALM analysis) of the pension system's needs and return requirements. This was carried out in 2020 and resulted in the appropriate long-term allocation of shares remaining in the range of 50-70 percent of the portfolio. Interest-bearing investments accounted for approximately one third of the capital and real estate, and other alternative investments (real assets) amounted to 14 percent of the portfolio.
Long-term perspective warrants substantial equities allocation
AP4’s long-term assignment and a higher expected return for equities compared to other asset classes warrants a higher equities allocation, despite the relatively higher risks. Substantial exposure to Swedish equities and fixed income investments is warranted by an anticipated higher return relative to many other markets as well as by favourable opportunities for AP4 to generate excess returns through active management and lower currency hedging costs.
| Asset class | Market value, SEK bn | Exposure¹, % |
| Global equities | 194.5 | 39.7 |
| Swedish equities | 82.1 | 16.8 |
| Global fixed income | 88.4 | 18.0 |
| Swedish fixed income | 55.0 | 11.2 |
| Real assets | 70.0 | 14.3 |
| Other assets² | 0.0 | 0.0 |
| Currencies | 0.0 | 0.0 |
| Total investments |
489.8 | 100.00 |