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By Rachel Fixsen2021-02-22T15:23:00+00:00
Swedish national pensions buffer fund AP3 reported a 9.7% return after costs for 2020 – an investment result just above the 9.6% gain posted by fellow buffer fund AP4 and more than twice the 3.5% return achieved by another of the funds, AP2, 10 days ago.
One of the four main buffer funds backing the income pension – the main component on Sweden’s state or general pension – AP3’s annual report released on Friday revealed listed equities to have accounted for the bulk of the overall return last year.
The asset class, which made up 45.6% of AP3’s total portfolio, generated 15.1% in 2020 as a whole, contributing eight percentage points to the annual return. Within this category, Swedish shares ended the year with a 17.3% return.
2 Swedish AP funds record almost 10% returns for 2020
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Stockholm-based pension funds AP3 and AP4 recorded investment returns of almost 10% each in 2020,with both noting strong performance despite exceptional market movements.
AP4, the slightly bigger of the two funds, saw assets grow 7.5% to 449.4 billion Swedish kronor ($54.9 billion) in 2020. The fund achieved a 9.6% investment return, equal to a 39.3 billion kronor gain, its annual report said. In 2019 the fund returned 21.7%, or 75.2 billion kronor.
The fund s five-year annualized return was 9.8%, vs. 9.3% as of Dec. 31, 2019. The 10-year annualized return was 9.7%, down from 9.9% the year previous.
The fund s asset allocation as of Dec. 31 was 39.6% global equities, 16.7% Swedish equities, 20% global bonds, 10.6% Swedish bonds and 13.1% real assets.