The Fund posted a negative return of SEK –4.3 billion in 2018, which corresponds to -1.3 per cent, reflecting above all negative stock market developments in the global equities markets, but also good results in non-listed assets. The Fund has nevertheless exceeded its long-term return assumption of 4.5 per cent. In the last five years, the Fund’s average annual real return has amounted to 5.8 per cent and, over the past ten years, 7.7 per cent.
“For AP2, 2018 was characterised by an underlying strong global economy, but also by some turbulence in the markets as a result of various geopolitical events, preparations for the changed investment regulations and continued sustainability integration. One important aspect of the latter has been the implementation of our internally-developed indices, which focus heavily on sustainability factors. We will continue to act in the best interest of Swedish pensioners by applying a strategy characterised by a long-term outlook and perseverance, whilst continuously seeking to make improvements,” says Eva Halvarsson, CEO of AP2.
“The downturn in the equity portfolio was counteracted by solid returns on, for example, private equity investments, real estate and Chinese government bonds,” explains Eva Halvarsson.
“We welcome the new investment regulations and the opportunity to invest more in various types of non-listed assets, which could compensate for a lower anticipated return on some listed assets, help diversify the portfolio further and set better conditions for creating continued solid, risk-adjusted returns,” says Eva Halvarsson.
- AP2’s assets under management totalled SEK 334.8 (345.9) billion as of 31 December 2018, against which net outflows to the national pension system were charged in an amount of SEK –6.8 (–7.4) billion.
- The Fund posted a net result of SEK –4.3 (28.8) billion.
- The Fund’s return on the total portfolio was -1.3 (9.0) per cent, after commission and operating expenses. Excluding these costs, the portfolio generated a return of –1.2 (9.1) per cent.
- The relative return on the portfolio of quoted assets, excluding alternative investments and costs, amounted to –0.2 (0.1) per cent.
- Operating expenses in terms of asset management costs continued to be low, amounting to 0.06 (0.06) per cent for the period.
- Over the past five years, the Fund has generated an average real return of 5.8 per cent per year and over the past ten years, an average of 7.7 per cent per year.
|Fund capital carried forward, SEK billion||334.8||345.9|
|Net result, SEK billion||–4.3||28.8|
|Net payments to the national pension system, SEK billion||-6.8||–7.4|
|Fund capital brought forward, SEK billion||345.9||324.5|
|Asset management costs: operating expenses, %||0.06||0.06|
|Asset management costs: commission expenses, %||0.08||0.09|
|Total asset management costs, %||0.14||0.15|
|Return on total portfolio after costs, %||–1.3||9.0|
|Real return on total portfolio after costs, %||–3.3||7.1|
|Annualised return after commission and operating expenses, 5.0 years, %||6.9||9.8|
|Annualised return after commission and operating expenses, 10.0 years, %||8.8||6.0|
|Real annualised return after commission and operating expenses, 10.0 years, %||7.7||5.0|
The Swedish version of the AP2 Annual and Sustainability Report 2018 is published today and the English version will be available at www.ap2.se from beginning of March.
For further details, please contact Eva Halvarsson, CEO at AP2, or Ulrika Danielson, Head of Corporate Communications, on +46 31 704 29 00.