Andra AP-fonden (AP2) reported a total return after costs of -6.7 per cent for 2022, with a result amounting to SEK -29.2 billion, which reflects how the markets are affected by war in Europe, as well as rising inflation and interest rates. This had a negative impact on the Fund’s equities and fixed-income assets, while the Fund’s non-listed assets achieved a positive return. After net payments to the national pension system of SEK -4.7 billion, Fund assets under management totalled SEK 407.1 billion. The relative return was 0.3 per cent, with Swedish equities management outperforming the benchmark index by 2.9 per cent.

“2022 was a very turbulent year in several respects. Both equities and fixed-income assets fell in value, partly due to higher interest rate levels. However, AP2’s portfolio showed resilience and reversed by a relatively moderate -6.7 per cent compared with OMX Stockholm, which declined by approximately -13 per cent during the same period, while global indices such as MSCI World (excluding currency effects) fell by approximately -16 per cent. Our non-listed assets performed better than our listed assets, which was also in line with our expectations,” says Eva Halvarsson, CEO of Andra AP-fonden.

“Over time, we’ve built our portfolio for situations like the one that arose in 2022. We’ve placed great value on spreading the risks as far as possible between different types of asset classes and markets, between listed and non-listed assets and between different management models. Our assessment is that, over time, this creates a good and stable return, in line with our long-term mission,” says Eva Halvarsson.

“In the past ten years, AP2 has generated a return of 104.8 per cent, equivalent to an average annual return of 7.4 per cent. Adjusted for inflation, this corresponds to a real annual return of 5.0 per cent,” says Eva Halvarsson.

“Sustainability issues continue to be part of our DNA. For example, during the past year we’ve developed processes for how we can understand and measure the impact of our investments on people and the environment. We’ve also taken further steps regarding our timberland investments by defining ten criteria to be fulfilled, for us to consider them sustainable. The criteria include biodiversity, which is our latest prioritised focus area within sustainability,” says Eva Halvarsson.

Key ratios	31 Dec 2022	31 Dec 2021
Fund assets under management carried forward, SEK billion	407.1	441.0
Result for the year, SEK billion	-29.2	62.3
Net payments to the national pension system, SEK billion	-4.7	-7.5
Fund assets under management brought forward, SEK billion	441.0	386.2
Asset management costs: operating expenses, %	0.06	0.06
Asset management costs: commission expenses, %	0.05	0.05
Total asset management costs, %	0.11	0.11
Return after costs, %	-6.7	16.3
Real return after costs, %	-16.9	12.0
Annualised return after costs, 5 years, %	5.2	8.5
Annualised return after costs, 10 years, %	7.4	9.5
Real annualised return after costs, 10 years, %	5.0	8.3

The English versions of AP2’s Annual Report 2022, the Sustainability and TCFD reports will be available at www.ap2.se from mid March.

For further information please contact:
Eva Halvarsson, Andra AP-fonden’s CEO, tel. (+46) (0)31 704 29 00 or
Ulrika Danielson, Head of Communications and Corporate Governance, tel. +46 (0)709 50 16 13.

Andra AP-fonden is one of five buffer funds within the Swedish pension system and one of northern Europe’s largest pension funds. The Fund covers essentially all asset classes across the entire world. We are leading specialists in the Swedish pension system and strive to be a world-class asset manager. We are a global leader in integrating sustainability in our investments, for the benefit of the pension system. The Fund is a long-term and responsible asset manager. www.ap2.se