The AP Funds’ management mission means that the effects on pensions of automatic balancing should be limited, as it is only through this that the AP Funds’ returns are linked to outgoing pensions. The Funds should generate a high return while at the same time the risk should be low, based on the development of outgoing pensions. According to the law, the AP Funds must manage their funds in an exemplary way.
By law, the AP-funds follow investment rules which briefly are:
- Primarily acquire or hold assets that are liquid. Liquid assets refers to money market instruments or transferable securities that are, or will be within one year from the issue, intended to be traded on a trading venue or a corresponding marketplace outside the European Economic Area (EEA), etc.
- At least 20 per cent of the Fund’s assets must be invested in receivables with low credit and liquidity risk.
- A maximum of 40 per cent of the assets may be exposed to currency risk.
- A maximum of 10 per cent of the Fund’s assets may be exposed to an issuer or group of issuers of interrelated parties.
- Equities in listed Swedish companies may not exceed 2 per cent of the total market stock exchange value.
- The Fund may control at most 15 per cent of the votes in a single listed company.*
- At the time of investment, a maximum of 40 per cent of the real value of the assets held by the Fund may be placed in illiquid assets.
- Industry or economic policy considerations may not be applied to investment decisions.
- The Fund’s assets must be managed in an exemplary manner through responsible investments and responsible ownership, without compromising the overall objective of high returns.
* This is a temporary rule due to the economic unrest as a consequence of COVID-19. The rule is usually ‘at most 10 per cent of the votes in a single