Stockholm-based AP3 has held onto its position as the largest of Sweden’s national pensions buffer funds after a first half where strong stockmarket gains more than made up for real assets losses.
Releasing its interim report this morning – the last of the big-four AP buffer funds in the state pension system to do so – AP3 posted a 5.5% return after costs, bringing its total assets to SEK491.5bn (€44.3bn) by 30 June from SEK468.4bn six months earlier.
After publishing their first-half 2023 results, AP3 is confirmed once more as the largest of the four funds, having overtaken the previous leader, AP4, 12 months ago.
AP4 now ranks as number two with SEK485.6bn, followed by AP1 with SEK446.4bn and AP2 with SEK423.9bn.
The four funds were given equal amounts of capital back in 2001 when they were tasked with their current mission.
Staffan Hansén, who took over as chief executive officer in December from AP3’s longstanding CEO Kerstin Hessius, said: “We delivered a satisfactory return in the first half of the year, in line with our relatively cautious view on the markets.
“The economic outlook, direction of interest rates and the real economic effects of central bank tightening are marked by continued uncertainty, and we have therefore not made any major changes in our investment portfolio,” he said.
Listed equities produced a 13.3% return in the reporting period for AP3, whose assets are 78% internally managed, contributing 5.3 percentage points of the overall return, the report showed.
Fixed income investments generated just 0.8% in returns, while alternative investments made a -2.5% loss.
Within alternatives, real estate suffered a -3.8% loss and infrastructure a -4.9% loss, the interim report revealed. Timberland, however, produced a 3.1% gain.