The external framework for the Fund’s risk-taking is determined by the investment rules laid down in the AP Funds Act. AP2’s Board of Directors annually decides on the strategic risk framework, which consists of three parts. The starting point is the allocation range for the overall asset classes included in the strategic allocation. These aim to ensure that the actual portfolio does not deviate too much from the strategic allocation and thus from the long-term needs of the pension system, while at the same time allowing for reasonable scope for medium- and short-term adjustment of the portfolio in order to improve returns.

The allocation ranges are complemented by two additional forms of risk mitigation. The first of these is based on the fact that the total (absolute) risk over time should not deviate too much from the level of risk resulting from the strategic allocation and, by extension, the needs of the pension system. The second is that the relative risk should also be limited. The Board also decides on the Fund’s Strategic Evaluation Index, which serves as a benchmark for the above-mentioned governance and evaluation.