Andra AP-fonden (AP2) reported a total return of 4.9 per cent, after costs, for the first half of 2024. The result amounted to SEK 20.6 billion and the fund capital amounted to SEK 445.8 billion at the end of the period.

The global economy saw a strong first half of 2024. Growth forecasts were upgraded and risk assets performed well, with several stock indices reaching all-time highs. Meanwhile, there are concerns about how geopolitical tensions, surprisingly weak economic statistics, fiscal policy responses to higher debt levels and interest rates, and persistent inflation will impact the future development.

“The equity and fixed income markets have developed well during the first half of 2024, which contributed to AP2’s total return of 4.9 per cent for the period. AP2’s dynamic investment strategy, with continuous adjustments of the Fund’s currency exposure and allocation to equity versus fixed income assets, has contributed to this return. We also work to avoid concentrations in large companies or individual industries and place high financial and sustainability requirements on our investments,” says Eva Halvarsson, CEO of AP2.

“During the first half of 2024, we have carried out a comprehensive review of our management strategy, with significant changes in governance structure, organisation, investment beliefs, vision and values, with the goal of creating returns and balancing risks in a more dynamic and efficient way,” says Eva Halvarsson.

“We are convinced that these changes will strengthen our ability to deliver long-term sustainable returns that contribute to a good pension for today’s and tomorrow’s pensioners,” says Eva Halvarsson. “By being more dynamic and proactive in our fund management, we can better adapt to a changing environment and create greater value.”

Read the full interim report (pdf) on the Fund’s website www.ap2.se

For further information please contact:
Eva Halvarsson, CEO of AP2, tel. +46 (0)31 704 29 00 or
Åsa Mossberg, Head of Corporate Communications, tel. +46 (0)705 25 11 81.

AP2’s Female Representation Index 2024 shows that the proportion of female board members in Swedish listed companies listed on Nasdaq has decreased in the past year to 35.5 per cent, from 36.1 per cent in 2023 and on par with 2022 at 35.4. The proportion of women in listed companies’ management teams, on the other hand, increases from 26.4 per cent to 28.8 per cent, which is the highest level measured since the survey started in 2003.

During the last ten-year period, the proportion of women, both on the boards of listed companies and in the management teams, has increased by approximately one percentage point per year. During the period, the proportion of women on boards has increased by 10.8 percentage points, but the trend leveled off during the second half of the period. The proportion of women in management teams has increased by 10.4 percentage points, and it continues to increase at a steady pace even in the later years of the survey.

In 2015, the Swedish Corporate Governance Board communicated a goal of a 40 per cent combined board representation for the least represented gender. The companies have some way to go to reach this goal. Less than half of the companies, 41 per cent, live up to this level, which is a decrease from 43 per cent of the companies in 2023. The survey also shows that the percentage of women among newly elected board members is 38.3 per cent, which is a higher percentage than in existing boards. However, it is noted that the target of 40 per cent will not be reached at this rate of change.

The survey shows that companies with nomination committees have a higher proportion of women on the board than companies without a nomination committee. Companies whose nomination committees have female representation also have an average of five percentage points higher proportion of female board members compared to all-male nomination committees. At the same time, half of all nomination committees lack a female representative.

Of the 356 companies examined in AP2’s Female Representation Index 2024, the number of female board chairpersons decreased from 34 to 32, which corresponds to 9 per cent of the companies. The number of women CEOs is also decreasing, 42 (45). The proportion of companies with a female CEO thus amounts to 11.8 per cent.

“We have seen steady growth in the proportion of female board members since we introduced the Female Index in 2003. Unfortunately, the increase has leveled off in recent years and this year it is decreasing somewhat. The companies have some way to go to reach the goal of 40 per cent women on the boards,” says Eva Halvarsson, CEO of AP2.

“It is gratifying that our Female Index shows that the proportion of women in management continues to increase, which is an important factor for there to be a good recruitment base for female board members in the future,” says Eva Halvarsson.

“Diversity is an important issue for the Fund and is one of five focus areas within sustainability. The Fund’s starting point is that companies that work with diversity, equity and inclusion not only take sustainability issues very seriously but are also more competitive and thus create better value,” says Eva Halvarsson.

The largest proportion of female board members can be found this year in the Finance and Telecom & Media industries, 39.6 and 39.5 per cent, respectively. The industries Materials and Consumer discretionary are at the bottom with less than 30 per cent women. In the management groups, the proportion of women is greatest in the Real Estate, Healthcare and Services industries, while the lowest proportion is found in Telecom & Media and Energy & Environment, where only one in five people in the management groups are women.

Background to AP2’s Female Representation Index

AP2 has since 2003 conducted an annual survey to determine the proportion of women at middle management level, in executive positions and on the boards of listed companies. This year is the second time AP2 compiles the Female Representation Index internally, based on data from the ownership service Holdings. The survey for 2024 included 356 primary and secondary listed companies on Nasdaq OMX Stockholm. In addition, the survey records the proportion of women who have graduated from study programmes that constitute the traditional recruitment base for management groups and boards.

Read the report (in Swedish) at Diversity, equity and inclusion – Andra AP-fonden (ap2.se)

For more information, please contact:
Eva Halvarsson, CEO of AP2, phone +46 (0)31 704 29 00
Åsa Mossberg, Head of Communications, phone +46 (0)705-25 11 81
www.ap2.se

The figures refer to the 356 companies included in the survey listed on NASDAQ OMX Stockholm, unless otherwise specified.

The First-Fourth AP Funds performed well in 2023 and strengthened the financial position of the income pension system by SEK 142 billion. The result corresponds to an average return of 8.1 per cent. At year-end, the four funds managed total assets of SEK 1,880 billion. The net payments of the AP Funds to the pension system totalled SEK 19 billion. This contributes strongly to the stability of the income pension system and its mission to maximise benefits for current and future pensioners.

The average return for the year was 8.1 per cent after costs. The average return of the AP Funds over the last five and ten years amounts to 8.5 and 8.0 per cent per year, respectively, compared with the income index’s performance of 3.5 and 2.8 per cent per year over the corresponding periods. The income index is used to calculate pensions and pension rights in the income pension system. When the returns of the AP Funds exceed the performance of the income index, the AP Funds contribute to the strength of the pension system. 

At the end of 2023, the total fund assets of the AP Funds amounted to SEK 1,880 billion. During 2023, the AP Funds paid out SEK 19 billion to cover the pension system’s deficit. Since they were launched in 2001, the AP Funds have made net payments of SEK 272 billion to the pension system. At the same time, their returns have contributed to the financial strength of the pension system, and the AP Funds’ share of the pension system now accounts for almost 16* per cent of pension assets, compared with 10 per cent in 2001. 

The AP Funds conduct cost-effective management that provides good returns after costs and also builds confidence in the AP Funds as the authorities for and managers of public pension funds. In 2023, total management costs amounted to 0.08 per cent of assets under management. The AP Funds are cost-effective in international benchmarking.  

During the year, the AP Funds continued with their efforts to achieve portfolios with net zero emissions. In 2023, the carbon emissions of the portfolios were reduced by a further 8 per cent. 

Kristin Magnusson Bernard CEO AP1, Eva Halvarsson CEO AP2, Staffan Hansén CEO AP3 and Niklas Ekvall CEO AP4 make a joint statement:  

“Our collective result for 2023 shows that all of us, with our different management strategies, navigated well in unsettled financial markets and can summarise a stable year. This means that the AP Funds have made a strong contribution to the stability of the pension system. From a 10-year perspective, the return has been high, averaging 8.0 per cent per year, compared with the average increase of 2.8 per cent per year for the income index. We are recognised internationally as a role model in sustainability and have continued to develop this important aspect via both responsible investment and responsible ownership.” 

* According to Swedish Pensions Agency Annual report 2023 (total fund capital from AP1, AP2, AP3, AP4, AP6). 

More information is available in the annual reports and sustainability reports published by the AP Funds at www.ap1.se, www.ap2.se, www.ap3.se and www.ap4.se 

 
For more information, contact: 
Sara Christensen, Head of Communications, AP1, sara.christensen@ap1.se 
Ulrika Danielson, Head of Communications, AP2, ulrika.danielson@ap2.se 
Lil Larås Lindgren, Head of Communications AP3, lil.lindgren@ap3.se 
Karoline Hammar, Head of Communications, AP4, karoline.hammar@ap4.se 

The AP Funds (AP1-AP4) 
The AP Funds manage the buffer capital in the national pension system on behalf of the Swedish Parliament and the Swedish people, for the benefit of current and future pensioners. The AP Funds are required to manage their assets in an exemplary way through responsible investments and ownership. Particular attention is paid to how sustainable development can be promoted without compromising the overall objective of maximising the benefits for the pension system. The AP Funds all have the same mission but different management strategies, and are governed by the National Pension Funds Act (2000:192). 

Andra AP-fonden (AP2) reported a total return after costs of 5.9 per cent for 2023, with a result amounting to SEK 23.8 billion, which was affected by a positive development, primarily in the Swedish and foreign developed equity markets. After net payments to the national pension system of SEK -4.8 billion, Fund assets under management totalled SEK 426.0 billion. The relative return was 0.2 per cent.

“2023 was an eventful year. Inflation and interest rates peaked in the summer and then fell in the latter part of the year, which contributed to a strong finish. Our result has been affected both by a positive development of primarily Swedish and foreign developed equity markets, but also by a negative development mainly within our real-estate investments,” says Eva Halvarsson, CEO of Andra AP-fonden.

“Internally, the year was characterised by extensive work to reshape governance and organisation in order to better cope with a changing world. Naturally we have always devoted time and energy to continually improving the organisation, but in 2023 we worked alongside our employees and the Board to look at all aspects of operations. We reviewed our asset management strategy, with the aim of generating a better return using a more dynamic and efficient approach,” says Eva Halvarsson.

“One further change that affected 2023 was our efforts to cut costs. Before the start of the year, the Board decided to reduce the total cost budget by 16 per cent, which is a result of our decision to bring most of our externally managed mandates in-house, and to discontinue management of Chinese A shares. We have been able to achieve this without any additions to our internal resources. Relocating our office to new, smaller premises also means a cost reduction,” says Eva Halvarsson.

“In the past ten years, AP2 has generated a return of 92.4 per cent, equivalent to an average annual return of 6.8 per cent, says Eva Halvarsson.

“During 2023 we have continued to develop responsible ownership and responsible investments. This took place within all five focus areas prioritised by the Fund. Among other things, climate plans have been defined for additional asset classes and the Fund’s reporting has been expanded with emissions data for more asset classes and Scope 3. AP2 was also one of the financial players announced at the World Economic Forum in Davos in January 2024 as an early adopter of the new framework Taskforce on Nature-related Disclosures (TNFD), as the Fund will publish a report for 2023 in the spring, says Eva Halvarsson.

The English versions of AP2’s Annual Report 2023, the Sustainability Report 2023, the TCFD and the TNFD reports will be available at www.ap2.se during 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 (AP2) continued to develop responsible ownership and responsible investments in 2023. This took place within all of the now five focus areas prioritised by the Fund. Among other things, climate plans have been defined for additional asset classes and the Fund’s reporting has been expanded with emissions data for more asset classes and Scope 3. The Fund was also one of the financial players announced at the World Economic Forum in Davos in January 2024 as an early adopter of the new framework Taskforce on Nature-related Disclosures (TNFD), as the Fund will publish a report for 2023 in the spring.

“At AP2, we moved forward at full speed in 2023. Among other things, we have defined climate plans for more asset classes, including a process for the Fund’s investments in Swedish equities, with a detailed analysis and follow-up on the companies’ transition to net zero emissions. We have also continued to develop the Fund’s reporting, including emission data for more asset classes and scope 3,” says Eva Halvarsson, Andra AP-fonden’s CEO.

”Within biodiversity, we have analysed the Fund’s risk exposure within several of our asset classes and we are active in several global investor partnerships to combat deforestation. A very exciting collaboration has been initiated with the think tank Climate & Company to systematically identify deforestation exposure in global portfolios. Through this collaboration, we aim to create a publicly available tool that will be tested and applied to AP2’s holdings in listed equities,” says Eva Halvarsson.

“The Fund’s total carbon emissions, which include scope 1-3 and the more than 70 per cent of the Fund’s portfolio for which we report, continue to decline and decreased in 2023 by 25 per cent compared with the previous year. From 2019, we have reduced our total measured carbon emissions by approximately 48 per cent,” says Eva Halvarsson.

“Within corporate governance, we have expanded our voting in both Swedish and foreign companies. We have also had a number of dialogues with Swedish companies regarding incentive schemes, primarily the lack of performance-related goals and sustainability goals,” says Eva Halvarsson.

The English versions of AP2’s Sustainability Report and the TCFD and TNFD Reports will be available at www.ap2.se during 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 (AP2) and the German-based sustainable finance think tank Climate & Company have initiated a collaboration to systematically identify deforestation exposure in global portfolios. Through the collaboration, Climate & Company will assess and combine existing resources to create a publicly accessible workflow to be tested and applied to AP2’s holdings in listed equities. This endeavour aims to highlight how far practitioners get with existing (data) resources and pinpoint any apparent gaps.

Nature is not just a resource to be exploited. It is essential for human existence and a vast share of economic activity is directly or indirectly dependent upon having healthy ecosystems. Alarmingly, however, biodiversity is declining faster than at any time in human history, with far-reaching and irreversible consequences. Deforestation and land conversion are one of the main drivers of biodiversity loss and climate change. Sustainable land use and forest conservation play a crucial role in protecting biodiversity and limiting global warming.

AP2, as a signatory to the Financial Sector Commitment on Eliminating Agricultural Commodity-Driven Deforestation, aims to have a portfolio that does not contribute to deforestation by 2025. This is also in line with the Fund’s climate commitment to net-zero greenhouse gas emissions by 2045.

“We in the financial sector have a key role to play in accelerating the transition towards a deforestation-free economy through engagement with our portfolio companies and by reallocating capital. Through the collaboration with Climate & Company, AP2 is contributing to the development of practical guidance that becomes public and that the financial sector can use to map and quantify the deforestation risk in their portfolios,” says Åsa Mossberg, sustainability strategist at AP2.

“Through our collaborative approach, we offer investors clear guidance on systematically identifying potential exposure to deforestation. Our publicly accessible guideline aims to provide the required resources, minimising the time and staff resources needed to fulfil deforestation-free commitments. By doing so, we aim to demonstrate to regulators that existing data and tools are sufficient to get started, while also highlighting crucial gaps that, when addressed, will simplify evaluations in future,” said Malte Hessenius from Climate & Company.

The collaboration between AP2 and Climate & Company is funded by the Gordon and Betty Moore foundation.

For more information, please contact:

Åsa Mossberg, Senior Sustainability Strategist at AP2, åsa.mossberg@ap2.se or
Ulrika Danielson, Head of Communications at AP2, ulrika.danielson@ap2.se or
Malte Hessenius, Climate & Company, malte@climcom.org

Andra AP-fonden (AP2) reported a total return of 4.8 per cent, after expenses, for the first half of 2023. A profit of SEK 19.4 billion was achieved and the fund capital reached SEK 423.9 billion. During the period, SEK 2.6 billion was transferred to the pension system.

In the first half of 2023, the global economy performed better than expected, but with growth forecasts still subject to considerable uncertainty. Lower energy prices helped to dampen overall inflation and reduce the pressure on households.

“The first half of the year continued to be affected by uncertainty in the financial markets as a consequence of geopolitical tensions, rising interest rates and economic effects on households. However, the performance of the equity and fixed-income markets during the period was positive, which contributed to a total return of 4.8 per cent,” says Eva Halvarsson, CEO of Andra AP-fonden.

“Our assessment is that the prevailing market uncertainty will continue. Against this background, it is satisfactory that we have spread the risks as far as possible between different types of asset classes and markets, between listed and unlisted assets, and between different management models. Our assessment is that, over time, this will generate a good and stable return, in line with our long-term mission,” says Eva Halvarsson.

“Since it was established, Andra AP-fonden’s return has exceeded the Fund’s long-term return assumption and has thereby contributed positively to the stability of the pension system. Over the past ten years, the Fund’s return has averaged 7.5 per cent,” says Eva Halvarsson.

Read the full interim report (pdf) on the Fund’s website www.ap2.se

For further information please contact:

Eva Halvarsson, CEO of AP2’s, tel. no. (+46) (0)31 704 29 00 or

Ulrika Danielson, Head of Corporate Communications, tel. no. (+46) (0)709 50 16 13.

For just over 20 years, AP2 has measured the proportion of women on boards and in executive management teams and published the Female Representation Index. For 2023, the proportion of female board members in companies listed on Nasdaq Stockholm continues to increase and now amounts to 36.1 (35.4) per cent. This is the highest level measured since the survey started.

For the first time, the percentage of women on the boards of listed companies is now over 36 per cent, increasing from 35.4 per cent to 36.1 per cent. The stated goal of 40 per cent women on boards has still not been reached, but 43 per cent of the companies reach the target and as many as 85 per cent of the companies have a share of over 25 per cent of each gender.

For the first time since 2010, the percentage of women in listed companies’ management teams has decreased from 27.2 per cent to 26.4 per cent.

The number of female board chairpersons also increases slightly and is now 32 (30) and the number of women who are CEOs increases to 45 (43). For primary listed companies, the number of female board chairpersons has increased from 29 to 32 and from 41 to 44 female CEOs. The percentage of female CEOs this year amounts to 12.5 per cent, which is an increase from 12.1 per cent last year.

“I find it gratifying that our Female Index shows that the proportion of women on boards continues to increase, and that 38.6 per cent of newly elected members are women, which is higher than among the total number of female members. But it is worrying that the trend regarding the increase of women in management is broken”, says Eva Halvarsson, CEO of AP2.

“It is once again interesting to note that nomination committees with women are positively correlated with boards with a higher proportion of women. Companies without a nomination committee have a lower proportion of women on the board than other companies”, says Eva Halvarsson.

Within all market capitalization groups, the proportion of women on the board is increasing. The highest share is found in large cap, where the share amounts to 39.0 (37.7) per cent. This is followed by mid cap with 35.4 per cent (34.8) and small cap with 31.2 (30.6) per cent.

The percentage of women on boards in all listed companies, if the CEO is excluded from the board, amounts to 37.6 per cent. On the boards of primary listed large cap companies, the percentage of women amounts to 39.3 (40.4) per cent if the CEO is excluded from the board.

Background to AP2’s Female Representation Index
AP2 has since 2003 conducted an annual survey to determine the proportion of women at middle management level, in executive positions and on the boards of listed companies. This year is the first time AP2 compiles the Female Representation Index internally, based on data from the ownership service Holdings. The survey for 2023 included 360 primary and secondary listed companies on Nasdaq OMX Stockholm. In addition, the survey records the proportion of women who have graduated from study programmes that constitute the traditional recruitment base for management groups and boards.

For more information Female index – Andra AP-fonden (ap2.se)

Read the entire Swedish report.

For more information, please contact:

Eva Halvarsson, CEO of AP2, phone +46 (0)31 704 29 00

Ulrika Danielson, Head of Communications, phone +46 (0)709 50 16 13

www.ap2.se

The figures refer to the 360 companies included in the survey listed on NASDAQ OMX Stockholm, unless otherwise specified.

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.

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

Andra AP-fonden (AP2) continued to develop its sustainability work in 2022. This took place within all of the now five focus areas prioritised by the Fund. Review and revision of the Fund’s sustainability policy was a key activity during the year. Andra AP-fonden has also developed a new method, in six parts, of how the Fund’s sustainability work is conducted through responsible investments and responsible ownership.

“Review of our sustainability policy resulted in a decision to add another focus area, biodiversity, to the four previous focus areas. We also decided to expand the diversity area to include equity and inclusion,” says Eva Halvarsson, Andra AP-fonden’s CEO.

”Biodiversity – diversity within species and between species and ecosystems – is diminishing more rapidly than ever before in the history of humankind, with extensive consequences for the environment, people and the economy. AP2 has defined a long-term goal for its biodiversity work, which is to contribute to a net positive impact on nature by 2030 at the latest,” says Eva Halvarsson.

“The total carbon emissions for the Fund’s equity portfolios are continuing to decrease and declined by 10 per cent in 2022 compared with the previous year. From 2019, we’ve reduced our total carbon emissions for the listed equity portfolio by around 37 per cent,” says Eva Halvarsson.

“During the year, we drew up ten criteria that the Fund’s timberland investments must fulfil in order to be classified as a sustainability investment. The ten criteria mean, among other things, that managers of timberland assets must have a comprehensive and externally published policy for responsible investments, that timberland assets must be managed in a sustainable way that is verified by a third party under a certification scheme, and that all managers of timberland assets must integrate TCFD (Task Force on Climate-Related Financial Disclosures) recommendations into their reporting,” says Eva Halvarsson.

“Based on the UN’s Sustainable Development Goals, during the year we also evaluated how the Fund can understand and measure the impacts of our investments on the environment and people. The aim of the evaluation is to be able to implement targeted sustainability investments in a way that allows the Fund to set goals for, measure and follow up the expected positive impact of these investments. Another aim is to understand and be able to manage impact risks and opportunities across the entire listed portfolio,” says Eva Halvarsson.

The English versions of AP2’s 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