The Second AP Fund’s capital assets totalled SEK 227.5 billion on December 31st 2007, an increase of SEK 10.7 billion compared with year-end 2006. During the year, the Fund reported net inflows of SEK 2 billion. The net result for the year amounted to SEK 8.7 billion.

The Fund noted a return of 4.2 percent on its total portfolio, before commission and operating expenses. Net return, less expenses, was 4.0 percent.

Since its inception, and including the 2007 result, the Second AP Fund has maintained an average return of 6 percent per annum. This means that the Fund’s result is consistent with the average targeted return deemed necessary for the Fund to fulfil its responsibilities within the Swedish national pension system.

For the twelve months ending December 31st 2007, the Fund posted a relative return of -0.4 percent on quoted assets, before commission and operating expenses. This was largely attributable to rebalancing effects deriving from high market volatility. A new rebalancing procedure has been initiated.

Return on alternative investments was 13.4 percent.

The growth in the Fund’s capital is primarily attributable to the strong performance of global equities, where the Fund’s investments in emerging and Asian markets, excluding Japan, have posted high returns. The Fund’s relatively limited exposure in foreign exchange (11 percent), especially in US dollars, where the degree of exchange hedging is high, has limited the impact of a weak dollar during the year on absolute return.

“The past year is likely to go down in history as one of exceptional turbulence on financial markets. Even so, the Second AP Fund is able to report a favourable return for the fifth year in succession,” notes CEO Eva Halvarsson, Second AP Fund.

For further details, please contact CEO Eva Halvarsson, Second Swedish National Pension Fund/AP2 on +46 (0)31-704 29 00, or Carl Rosén, head of Corporate Governance & Communications, on +46 (0)739 40 10 10.

Poul Winslow will leave his role as CIO for Andra AP-fonden by April 2008. Poul will begin in a new position at Nordea building a Fund of Hedge Funds business.

– We are sorry that Poul leaves AP2 and wish him the best of luck, comments Eva Halvarsson, CEO at AP2.

The search process for a new CIO has already started.

For further details, please contact Eva Halvarsson, CEO of the Second AP Fund, or Carl Rosén, Head of Corporate Governance & Communication, on +46 (0)31 704 29 00.

The Second AP Fund has published its Corporate Governance Report for the period July 1st 2006 to June 30th 2007. The Report, which addresses a number of different themes, is intended for a wider public, in the hope of stimulating discussion of a broader range of topics.

“Interest in and pressure on us as investors is growing all the time. Our ‘customers’ – Sweden’s future pensioners, our politicians, companies, the media, pressure groups and many others – are extremely interested in what we do, and we have often been bad at explaining how our processes work and about our role as investors,” says Eva Halvarsson, CEO of the Second AP Fund.

For further details, please contact Eva Halvarsson, CEO of the Second AP Fund, or Carl Rosén, Head of Corporate Governance & Communication, on +46 (0)31 704 29 00.

The Fund’s capital assets amounted to SEK 232.8 billion as per June 30th 2007, corresponding to an increase since January 1st of SEK 16 billion, including inflows. This means that the Fund’s total portfolio, excluding expenses, showed a return of 7.0 percent for the six months ending June 30th 2007. Return on assets less commission costs and operating expenses amounted to 6.9 percent. The result for the report period was SEK 15.1 billion. The relative return on the Fund’s market-listed portfolio, excluding expenses, was 0.5 percent.

“The Fund’s selection of strategic portfolio and its portfolio of Swedish equities, which outperformed index, have been the key factors in its strong performance during the first half of 2007,” states Eva Halvarsson, CEO of the Second Swedish National Pension Fund.

“Our determination to enhance efficiency with respect to the major portion of the portfolio under in-house management is now starting to bear fruit, resulting in a solid relative return and comparatively low costs compared to similar fund managers.”

In the spring of 2007, the UN agency UNEPFI (The United Nations Environment Programme Finance Initiative) cited the Second AP Fund as a leading role model for sustainability issues within the finance sector. A Corporate Governance Report will be published separately. The English-language version will be available at the website from mid-September.

For further details, please contact CEO Eva Halvarsson, Second Swedish National Pension Fund, or Carl Rosén, head of Corporate Governance & Communications, on +46 (0)31 704 29 00.

The United Nations has selected the Second AP Fund, with 14 other pension funds around the world, as exceptionally successful in addressing sustainability issues in the finance sector.

The United Nations Environment Programme Finance Initiative (UNEP FI) and the United Kingdom Social Investment Forum (UKSIF) have published a book in which a number of international pension funds are presented as leading role models for sustainability issues within the finance sector. The Second AP Fund has been selected as the sole Swedish representative.

UNEP FI and UKSIF have gathered examples of concrete and practical strategies employed by some of the world’s leading pension funds and presented them in this joint publication. These examples are intended to give other fund managers ideas as to how sustainability issues can best be integrated as part of the investment process.

More than 25 pension funds were initially considered for inclusion, 15 of which were selected for the published report. Examples range from the California Public Employees Retirement System (CalPERS) to the employees pension fund of Banco do Brasil (PREVI) and Fonds de Réserve pour les Retraites (FRR), France’s equivalent to Sweden’s “AP Funds”. The report presents a large number of strategies, featuring varying degrees of implementation, from Brazil, Canada, France, Norway, Sweden, Switzerland, Thailand, Holland, the USA and Great Britain. The Second AP Fund and Norska Statens Pensionsfond (Norway’s former Petroleum Fund) are the only Nordic examples included in the report. The report is available in its entirety on the Web at http://www.unepfi.org/fileadmin/documents/infocus.pdf

For further details, please contact Carl Rosén, head of Corporate Governance & Communications, Second Swedish National Pension Fund/AP2, on +46 (0)739 40 10 10

The Second AP Fund’s capital assets amounted to SEK 216.8 billion as per December 31st 2006, an increase of SEK 26.2 billion compared with the preceding year. During the year, the Fund reported a net inflow of SEK 1.7 billion. Net profit for the year totalled SEK 24.5 billion.

The Fund posted a return of 13.0 percent on the total portfolio, before commission fees and operating expenses. If these expenses are included, the portfolio generated a return of 12.8 percent.

The Fund noted a relative return of 0.2 percent for market-listed assets, before commission fees and operating expenses, for 2006. All asset classes noted a positive relative return. This positive return derived largely from successful in-house and external management of foreign equities.

The vigorous growth in capital assets is primarily attributable to the high proportion of equities in the Fund’s portfolio and a low level of currency exposure. The level of currency exposure as per December 31st 2006 was 11.7 percent.

The proportion of the Fund’s total portfolio managed according to quantitative models has grown from 11 to 31 percent.

A Joint Ethical Committee has been established in collaboration with the First, Third and Fourth AP Funds, to monitor interests in foreign companies with respect to environmental and ethical issues.

Since its inception, and including net investment income for the twelve months ending December 31st 2006, the Second AP Fund has sustained an annual average return on investment (ROI) of 6.3 percent. This exceeds the ROI average considered essential for the Fund to fulfil its long-term responsibilities within the Swedish pension system.

“We are proud of this result. The total return on investment is good and all asset classes have noted a positive relative return,” says CEO Eva Halvarsson, Second AP Fund.

For further details, please contact CEO Eva Halvarsson, Second Swedish National Pension Fund/AP2 on +46 (0)31-704 29 00, or Carl Rosén, head of Corporate Governance & Communications, on +46 (0)739 40 10 10.

Through the formation of an Ethical Council, Sweden’s national pension buffer funds, AP1, AP2, AP3 and AP4, have coordinated their SRI analysis of environmental and ethical compliance in the foreign companies where the funds have holdings. The collaboration will involve monitoring of the funds’ investment portfolios with regard to violation of international conventions, analysis and dialogue with the portfolio companies. This collaboration does not extend to Swedish companies, for which the respective AP funds will continue to conduct their own dialogues and analyses.
In a recent procurement of consulting services for ethical and environmental analysis, the four AP funds all chose the same supplier, GES Investment Services. The funds’ collaboration will be based on a systematic screening of their investment portfolios in order to identify and examine possible infringement of international norms and conventions, an analysis for which GES has been given responsibility. In addition, GES will support the funds with assistance in individual dialogues, analyses, advice and coordination of the Ethical Council’s activities.

A total of around 3,500 companies will be reviewed, which, based on earlier experience, typically leads to the identification of some twenty candidates for more in-depth assessment. Every year, the ambition is to conduct an active dialogue with around ten companies that can be associated with infringement of international conventions in areas related to the environment, human rights and labour rights. Coordination of the AP funds’ activities will give international investors a powerful partner in Sweden with an active commitment to the ethical and environmental aspects of corporate social responsibility.

“Within the framework of our common mission, we see good opportunities to cooperate in this area. By joining forces we will enable us to avoid redundant efforts and concentrate our resources on the most urgent areas for improvement,” says AP1’s Nadine Viel Lamare, who will be the Ethical Council’s first Chairman.

“Together the funds have net assets under management of around SEK 800 billion, which in itself provides greater scope to influence individual companies than if each fund were to act independently, and we will also be able to conduct more parallel discussions. Furthermore, by coordinating our activities we will facilitate collaboration with other international stakeholders who are actively committed to ethical and environmental compliance,” she adds.

AP1 has previously cooperated with other investors in a number of successful dialogues with multinational corporations which have changed their routines and policies in response to pressure from the Fund. Most recently, the US-based Marriott hotel chain was persuaded to revise its human rights policies with a focus on combating child sex tourism.

The Ethical Council’s is made up of one representative from each of the AP funds. Chairmanship of the Ethical Council, which is initially held by AP1’s representative Nadine Viel Lamare, will be alternated between the funds.

Decisions to exclude companies from the investment portfolio will be made by the individual funds.

For more information contact
Nadine Viel Lamare, Chairman, Ethical Council
Tel: +46 8-566 20 270
Mobil: 0+46 709-681 270
E-mail: nadine.viel.lamare@ap1.se

The Second AP Fund has confirmed its position concerning Wal-Mart’s alleged infringement of human rights in working life. Wal-Mart, which is the world’s largest retailer, posted sales of USD 285 billion in 2005.

Dating from 2003, the Second AP Fund has written letters, exercised its voting rights at AGMs and participated in an investor group to influence the company, but the company has failed to indicate any change in its attitude to employee rights.

Norska Etikkrådet (the Norwegian Council on Ethics), which acts as an advisor to the Norwegian State Pension Fund “Utland” (formerly known as the Petroleum Fund), has gathered extensive evidence to demonstrate how Wal-Mart, in a serious and systematic manner, has infringed internationally accepted ethical norms.

“Wal-Mart has so many documented incidents concerning the infringement of norms, both within its own operations and throughout its supply chain that, in our opinion, the existence of an inherently unethical system is placed beyond all reasonable doubt,” says Eva Halvarsson, CEO, Second AP Fund.

The Second AP Fund has disposed of its interest in Wal-Mart and Wal-Mart Mexico, which was held in the form of shares and bonds.

For further details, please contact Eva Halvarsson, CEO, Second AP Fund; or Carl Rosén, Head of Corporate Governance and Communications,
on +46 (0)31 704 29 00.

For the second year in succession, the Second AP Fund is publishing a separate corporate governance report. The report addresses the Fund’s role in connection with the Skandia takeover and the spinning-off of Husqvarna, and describes action taken by the Fund at a number of AGMs during the spring. The report concludes with a summary of the Second AP Fund’s efforts with respect to corporate ethics and the environment.

“The Second AP Fund’s involvement in corporate governance issues is designed to enhance the value of its capital investment. Active ownership and the Fund’s commitment to governance issues are intended to improve prospects of a higher long-term return on assets under management,” says Eva Halvarsson, CEO, Second AP Fund.

For further details, please contact Eva Halvarsson, CEO, Second AP Fund; or Carl Rosén, Head of Corporate Governance and Communications, on +46 (0)31 704 29 00.

The Fund’s capital assets amounted to SEK 194.8 billion as per June 30th 2006, corresponding to an increase since January 1st of SEK 4.3 billion, including inflows. This means that the Fund posted a return of 1.9 percent in the first half of 2006, excluding expenses. The result for the report period was SEK 3.5 billion.

“This is a good result, in light of the difficult market conditions experienced during the first half,” says Eva Halvarsson, CEO of the Second Swedish National Pension Fund/AP2. “This favourable outcome may primarily be attributed to our selection of a benchmark portfolio featuring low currency exposure and the Fund’s own choice of indexes.”

“The task of making the Fund still more efficient continues. In recent years, the number of mandates under external management has been reduced, and 75 percent of total assets are now under in-house management,” says Eva Halvarsson.

For further details, please contact CEO Eva Halvarsson, Second Swedish National Pension Fund, or Carl Rosén, head of Corporate Governance & Communications, on +46 (0)31 704 29 00.