The Second AP Fund’s net result for the year amounted to SEK 22.3 billion. Return relative to benchmark index was 0.8 percent, excluding alternative investments and expenses. All asset classes outperformed their respective benchmark indices. The Fund’s high exposure in Swedish equities has also continued to contribute strongly to the positive absolute return in 2010.

• The Second AP Fund’s assets under management totalled SEK 222.5 (204.3) billion on December 31, 2010, against which net outflows to the national pension system were charged in an amount of SEK 4.0 (3.9) billion.
• The net result for the year amounted to SEK 22.3 (34.9) billion.
• The Fund’s return on the total portfolio was 11.2 (20.6) percent, excluding commission fees and operating expenses. Including these expenses, the portfolio noted a return of 11.0 (20.3) percent.
• The Fund’s active management posted an ongoing positive result. The relative return on the Fund’s overall portfolio, excluding alternative investments, was 0.8 percent, corresponding to SEK 1.4 billion.
• The Fund’s low FX exposure of 12 percent was favourable, contributing positively to the net result.
• During the year, the Fund made its first investments in forest and agricultural real estate.

“For the second year in succession, the Second AP Fund has been able to generate a solid result, achieving a growth in the worth of its market assets in excess of the five percent target. Equally pleasing is the fact that the active management of our assets has in two years contributed a total of SEK 2.6 billion,” states Eva Halvarsson, CEO of the Second Swedish National Pension Fund/AP2.

The English-language version of the AP2 Annual Report 2010 will be available at www.ap2.se from the end of February.

For further details, please contact the Second AP Fund’s CEO, Eva Halvarsson, at +46 (0)31-704 29 00, or the Head of Communications, Ulrika Danielson, at +46 (0)709-50 16 13.

The Second Swedish National Pension Fund – AP2 has decided to sign framework agreements with Ethix SRI Advisors, GES Investment Services, Northwest & Ethical Investments and Sustainalytics for the possibility of delivering analysis concerning environmental, social and ethical aspects and advice.

The decision has been made on the basis that these tenders are considered to be the most economically advantageous based on the established criteria in the request for proposal. The assessment of the criteria was made based on the material included in the offer and then confirmed, clarified or deepened by meeting or teleconference, or in contact with references.

• Quality, competence and experience have been assessed according to the specifications of the areas listed.
• Experience in working with organizations such as the AP funds and the Ethical Council has been assessed from what has been stated in the tenders.
• Prices have been assessed according to what has been presented by the tenders.

Framework agreements covering all services addressed in the request for proposal will be signed with Ethix SRI Advisors, GES Investment Services and Sustainalytics. The framework agreement with Northwest and Ethical Investments will be signed solely on part 4 covering advice and support with dialogs.
According to the law on public procurement there will be no signing of agreements until ten days has passed from the date given in this decision.

For more information contact:
Ulrika Danielson, Head of Communications
Telephone +46(0)31 704 29 00

The Second AP Fund today publishes its 2009/2010 Corporate Governance Report. The Fund’s governance activities are presented together with a number of feature articles, covering topics such as the development of the number of women on publicly quoted boards, an interview with the venture capitalist Vinod Khosla, nomination committees according to the Swedish system and the Fund’s evaluation of company’s incentive plans.

For further information, please contact:
Eva Halvarsson, CEO Second Swedish National Pension Fund/AP2, on +46 (0)31 704 29 00
Ulrika Danielson, Head of Communications, on +46 (0)31 704 29 29.

The Second AP Fund’s return on invested capital contributed SEK 2.5 billion during the first half of 2010. After pension disbursements of SEK 2.0 billion, the Fund’s capital assets amounted to SEK 204.8 billion. The Fund posted a total return, excluding costs, of 1.3 percent. Relative to the benchmark index, return was 0.4 percent, excluding alternative investments and costs. All asset classes outperformed their respective benchmark indices.

• The Second AP Fund’s assets under management amounted to SEK 204.8 (182.5) billion as of June 30 2010.
• The Fund posted a first-half net result of SEK 2.5 (10.9) billion. Net outflows to the pension system amounting to SEK -2.0 (-1.7) billion were charged against the net result.
• The Fund’s return on the total portfolio was 1.3 (6.4) percent, excluding commission costs and operating expenses. Including these costs, the portfolio generated a return of 1.2 (6.3) percent.
• The Fund noted a relative return of 0.4 (0.1) percent including implementation effects for the strategic benchmark portfolio, but excluding alternative investments, commission costs and operating expenses.
• The Fund’s level of currency exposure was 9 percent.
• In June, the Fund decided to make its first investment in an agricultural fund (Teays River, a US fund).
• The assets under management outperformed their benchmark indices in all asset classes. The Second AP Fund’s portfolio, which continues to feature a high proportion of equities, has benefited from the favourable performance of the Swedish equities market. This trend has been sustained during the first six months of this year. The return generated on Swedish equities during the first half amounted to 7.2 percent, 0.3 percent improvement against the benchmark index, states Eva Halvarsson, CEO of the Second Swedish National Pension Fund/AP2.

A Corporate Governance Report will be published separately in October.

For further details, please contact CEO Eva Halvarsson, Second Swedish National Pension Fund, or Ulrika Danielson, head of Corporate Communications, on +46 31 704 29 00.

The annual study conducted by the Second Swedish National Pension Fund (AP2) reveals that the proportion of female representatives on company boards has risen to 22.2 percent, the highest level attained since the study started in 2003. Even so, the proportion of women on corporate executives has fallen to 13.8 percent.

Compared to the preceding year, the proportion of female representatives on company boards has risen from 19.1 percent to 22.2 percent. This said, the positive trend shown by the study since 2005, concerning the number of women on the executives of publicly quoted companies, has been broken. Compared to last year, female representation on corporate executives has declined from 14.3 percent to 13.8 percent. The disparity in female representation on corporate executives and on company boards has thereby increased from 4.8 percent to 8.4 percent.

“It is pleasing that the proportion of women on company boards is on the increase. It also demonstrates that efforts to promote increased female representation have had an impact. It is nevertheless slightly worrying that this year we see a decline in the proportion of women in executive positions, given the fact that this represents a crucial source in the recruitment of representatives to company boards,” states Eva Halvarsson, CEO of the Second Swedish National Pension Fund.

The large-cap companies and industries with a high proportion of female employees note the highest levels of female representation. The service and consumer goods industries enjoy the highest levels of female representation on their boards, while the healthcare and financial sectors boast the highest proportion of female executives.

In the past 30 years, the proportion of women graduating in disciplines from which company executives and board members have traditionally been recruited has increased from less than 20 percent to more than 40 percent today. However, the proportion of women then declines in stages, from new graduate to employee (almost one in three), to management (one in four) and to senior executive (one in seven).

“A more equitable balance with respect to gender is decisive in ensuring the effective composition of a board. At the same time, it is important that we, as shareholders, should also pursue the issue of increased diversity in terms of age, background, experience and competence,” notes Eva Halvarsson.

Since 2003, the Second Swedish National Pension Fund has conducted an annual study in association with Nordic Investor Services to determine the proportion of women at mid-management level and on the executives and boards of publicly quoted companies. Furthermore, the study determines the proportion of women who have graduated in disciplines from which company executives and board members are traditionally recruited.

For further details, please contact:
Eva Halvarsson, CEO, Second Swedish National Pension Fund, on +46 (0)31-704 29 00
Ulrika Danielson, Head of Communications and HR, on +46 (0)709-50 16 13

The Ethical Council of the First, Second, Third and Fourth AP Funds today publishes its annual report for 2009. The report details the dialogues that the Council holds with companies where indications exist that the companies in question have violated the AP funds’ ethical guidelines.

The Council uses dialogue and cooperation as its main tools for influencing companies to act responsibly. The discussions have two aims: encouraging companies to address violations of international conventions and to implement proper systems to prevent future abuses. In 2009, the Council concluded four dialogues after achieving its objectives. The four companies involved were Grupo Ferrovial, PetroChina, Thales and Yahoo. These discussions were ongoing for a couple of years and resulted in satisfactory improvements in each case.

The Ethical Council also takes an active role in investor initiatives aimed at encouraging companies to raise their level of transparency, to act more responsibly and to address major ethical and environmental issues. In 2009 the Council developed its work and processes with other investors to improve its ability to influence companies. Initiatives included the joint proposal with a Dutch and an American pension fund of a resolution to the general meeting of the US mining company Freeport McMoran.

In spite of numerous successful dialogues and initiatives, the Ethical Council has in the first quarter of 2010 recommended the AP funds to exclude the company Elbit Systems Ltd from their portfolios due to the fact that dialogue between the Council and the company has not produced the intended results. All the AP funds have decided to follow this recommendation. The Ethical Council recommended that Elbit Systems Ltd should be excluded from each portfolio because it deems that the company can be linked to violations of fundamental conventions and norms through its active development, delivery and maintenance of a custom-made monitoring system for certain parts of the separation barrier being built on the West Bank. The Council has noted that both the European Union and the Swedish government consider the part of the separation barrier being built on West Bank to be illegal under international law. This position is also supported by the advisory opinion from 2004 by the International Court of Justice regarding the separation barrier.

Annika Andersson, Chair of the Ethical Council in 2010, said: “The work of the Ethical Council is based on a rigorous process where dialogues with companies are our main tool. Staying on as a shareholder to continue the dialogue produces visible results, but it also requires resources and patience. As a last resort, the Ethical Council may recommend each fund to exclude the company if the dialogue fails to produce the desired result. This is now the case with Elbit Systems Ltd.”

Read more about company dialogues and the Ethical Council’s other activities in the annual report for 2009, available for download at www.ethicalcouncil.com

For further information, please contact:
Annika Andersson, Chair of the Ethical Council 2010
Tel: +46 8 787 75 69

Hans Fahlin (52) has been appointed new CIO at the Second Swedish National Pension Fund/AP2. He takes up his new post in mid-April. Hans has 25 years’ experience of the financial industry, the past 17 years in asset management. He has held several leading posts within Alfred Berg/ABN AMRO, including a position as CEO for Alfred Berg Kapitalförvaltning.

Hans Fahlin is a member of the Scientific Advisory Committee at the Institute for Financial Research (SIFR), as well as Chairman of Inquire Europe. Both organizations are engaged in building bridges between financial research and business practice within the financial industry. Hans is also a member of Riksbankens Jubileumsfond and Polar Music Prize Investment Committees.

• The Second AP Fund’s assets under management totalled SEK 204.3 (173.3) billion as per December 31st 2009, an increase of SEK 31 billion compared with the preceding year.
• The net result for the year was SEK 34.9 (-55.1) billion. The increase in assets under management was mainly attributable to the sharp recovery in global stock markets in 2009. During the year, for the first time, the Fund reported a net outflow from the national pension system amounting to SEK -3.9 billion.
• The Fund posted a return of 20.6 (-24.0) percent on the total portfolio, before commission fees and operating expenses. Including expenses, the portfolio noted a return of 20.3 (-24.1) percent.
• The Fund’s active management generated an active return of 1.2 percent, corresponding to SEK 1.8 billion for market-quoted assets, excluding alternative investments. The Fund’s relative return was 0.7 (-1.8) percent, including implementation effects for the strategic portfolio but excluding alternative investments, commission fees and operating expenses.
• The adjustments made to the strategic portfolio during the year have primarily involved a reallocation from global government bonds and global equities to credits and convertibles.

“Our portfolio has enjoyed a very strong recovery. We achieved an absolute return of 20.6 percent, or SEK 34.9 billion, the highest net result since the Fund’s start in 2001,” states Eva Halvarsson, CEO of the Second Swedish National Pension Fund/AP2.

The First, Second, Third and Fourth AP funds’ investment profit in 2009 was SEK 134 billion

• The First, Second, Third and Fourth AP fund, recorded a net profit of SEK 133.8 billion in 2009, corresponding to an average return of 19.4 percent.
• Total fund capital at year-end stood at SEK 808.8 billion, an increase of SEK 118.2 billion from the start of the year.
• In 2009 the net balance between pension system inflows and outflows was negative, resulting in the four AP funds having to pay SEK 15.6 billion during the year to cover the deficit.
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  For further details, please contact the Second AP Fund’s CEO, Eva Halvarsson, at +46 (0)31-704 29 00, or the Head of Communications, Ulrika Danielson, at +46 (0)709-50 16 13.

The AP-funds joint Ethical Council has received NRPN´s award for Best SRI-strategy 2009. NRPN stands for Nordic Region Pension and Investment News, and is a publication within the Financial Times Group.

”This recognition of our work makes us very proud. Our work within the Ethical Council is built upon a systematic work process where dialogues with companies to encourage them to act responsibly, collaboration with other investors and transparent reporting are important parts”, says Christina Hillesöy, AP3s representative and Chairwoman of the Ethical Council.

Today we publish the Second Swedish National Pension Fund/AP2’s Corporate Governance Report for 2008/2009.

As well as presenting the Fund’s governance activities, the Report contains feature articles on topics ranging from the estimated carbon footprint for the Fund’s portfolio companies and guidelines on sustainability issues for the private equity sector to how the Fund’s real estate interests address environmental concerns.

“Corporate governance issues have attracted considerable attention in the past year, both in the media and as part of the ongoing political debate. The Second AP Fund considers its participation in such discussions entirely natural, both with respect to individual issues as well as more general matters of principle,” states CEO Eva Halvarsson, Second AP Fund.

For further details, contact CEO Eva Halvarsson, Second AP Fund, on +46 (0)31 704 29 00, or Ulrika Danielson, Head of Communications, on +46 (0)709 50 16 13.