Strong return in continued turbulent market

Press release
With a return of 13.0% after costs, total fund capital increased to SEK 391.4 billion at the end of the first half of 2019. The portfolio’s active return during the first half of the year exceeded AP4’s benchmark portfolio by 1.7 percentage points. The half-year result amounted to SEK 45.2 billion. A net total of SEK 3.0 billion was paid out to the pension system during the first half of the year. Adjusted to a full-year basis, total costs amounted to 0.10% of average assets under management.

“The return during the first half of 2019 was the highest return that AP4 has had for a single first half-year since the start of the new pension system in 2001. This is of course very gratifying. But it illustrates perhaps above all the volatile market environment that we currently find ourselves in, and the fact that evaluation of a pension fund must be done over a long period of time in order to be meaningful,” comments Niklas Ekvall, CEO of AP4.

Key contributors to the return were the substantial exposure to equities – both globally and in Sweden – while fixed income investments and real assets also generated favourable returns during the first half of the year.

AP4’s active management made a continued significant contribution of 1.7 percentage points to the portfolio’s return, representing a positive profit contribution of SEK 5.8 billion.

“With this I can proudly say that AP4 has extended the already long period of positive, active returns that we have historically shown. Moreover, this further underscores the value of broad and high-quality active management that AP4 conducts,” comments Niklas Ekvall.

During the spring the government circulated a memorandum for feedback regarding certain other changes in the AP Funds’ investment rules. The memorandum addresses the second step in the modernisation of the AP Funds’ investment guidelines.

Niklas Ekvall comments further: “The proposals set forth in the memorandum entail continued significant limitations on investments in illiquid assets. Nor do they give the AP Funds equal conditions as other, comparable institutional investors. In its response AP4 points out that the memorandum’s proposals do not go far enough to achieve the previous statement about the legislative change, and that it is urgent to now create a set of rules that give the AP Funds sufficient flexibility to be able to operate in a rapidly changing financial market for many years into the future.”

Key ratios for AP4's operations June 30, 2019 June 30, 2018 2018
Fund capital at end of period, SEK bn 391.4 366.9 349.3
Net result for the period, SEK bn 45.2 13.7 -0.5
Net disbursements to pension system, SEK bn -3.0 -3.3 -6.8
Fund capital at beginning of period, SEK bn 349.3 356.6 356.6
Asset management costs, operating expenses, % 0.06 0.06 0.06
Asset management costs, commission expenses, % 0.04 0.04 0.04
Total asset management costs, % 0.10 0.10 0.10
Return on total portfolio, before asset management costs, % 13.0 3.9 -0.1
Return on total portfolio, net of asset management costs, %¹ 13.0 3.8 -0.2
Real return on total portfolio, net of asset management costs, %²
11.7 2.9 -2.3
Annualized total return after asset management costs, average 5 years, % 9.3 11.0 8.1
Annualized total return after asset management costs, average 10 years, % 10.4 8.7 9.9
Real annualized return after asset management costs, 10 years, %²
9.1 7.9 8.7

AP4's mission is to contribute to financial security for retirees of today and of tomorrow by managing part of the buffer capital of Sweden’s national pension system. AP4’s long-term perspective, responsibility as shareholder and strong commitment to sustainability creates the conditions for high returns at a low cost. In this way we contribute to more secure pensions.

AP4’s Interim Report can be read and downloaded at

For further information, please contact: 
Niklas Ekvall, CEO, phone: +46(0)8 787 75 51 
Tobias Fransson, Head of Strategy & Sustainability, phone: +46 (0)8 787 75 28