Second AP Fund reports a total return of 9.1 percent for 2017

The Second Swedish National Pension Fund (AP2) reported a total return on investment of 9.1 percent for the full twelve months, excluding expenses. Assets under management rose to SEK 345.9 billion. The net result was SEK 28.8 billion. The Fund’s performance in 2017 means that it once again has exceeded the long term targeted return in both the long and short term.

CEO, Eva Halvarsson, comments on the result:

“Our return has continued to develop positively after yet another year with good results at a low cost. We are following our long-term strategy and have worked intensively in the area of sustainability.”

“The average annual real return for the last five and ten years amounts to 9.0 and 5.0 per cent respectively. This exceeds our long-term goal and shows that over time we have the ability to create value for Sweden’s pensioners, even in periods characterised by a turbulent world around us with financial crises.”

“Our costs remain low even though in 2017 we experienced an increased cost in the supply chain. The way we deal with this is to manage more and more internally and continue to develop our activities in a cost-effective way. This means that in the cost evaluations, we continue to be highly competitive and keep our distance to most other actors in the industry.”

“We aim to develop our portfolio in line with the two-degree target and our vision has long been to integrate sustainability in all our management.”

“An important step in integrating sustainability as part of the investment decisions is that we have continued to implement ESG (Environmental, Social and Governance) in the global equities asset class in our internal quantitative management. It is approximately 29 per cent of the total portfolio and amounted to SEK 99 billion at year-end. During 2017, we designed two new so-called multi-factor indices where, ESG is the most important factor for the weighting in the indices.

  • AP2’s assets under management totalled SEK 345.9 (324.5) billion on December 31, 2017, against which net outflows to the national pension system were charged in an amount of SEK –7.4 (–6.6) billion.
  • The Fund posted a net result for the year of SEK 28.8 (30.5) billion.
  • The Fund’s return on the total portfolio was 9.1 (10.5) per cent, excluding commission fees and operating expenses. Including these costs, the portfolio generated a return of 9.0 (10.3) per cent.
  • The relative return on the total portfolio, excluding alternative investments and costs, amounted to 0.1 (–0.4) per cent.
  • Operating expenses, expressed as a percentage of asset management costs, remained low and amounted to 0.06 (0.07) per cent.

The English version of the AP2 Annual and Sustainability Report 2017 will be available at www.ap2.se from beginning of March.

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