The Second AP fund (AP2) in Sweden returned 4.8 per cent on its investments in the first six months of 2023, its half-year report has shown.

This marks an 11 percentage point improvement from the same period last year, when AP2’s return was -6.2 per cent.

The return amounted to SEK 19.4bn and the fund capital totalled SEK 423.9bn at the end of June 2023.

During the first half of the year, SEK 2.6bn was transferred from the fund to the pension system.

AP2 stated that, in H1 2023, the global economy developed better than expected, but with continued uncertainty in the growth forecasts.

The pension fund’s annualised return over the past five and 10 years was 5.5 per cent and 7.5 per cent respectively.

Commenting on the half-year report, AP2 managing director, Eva Halvarsson, said that while the first half of the year continued to be affected by uncertainty in the financial markets, the development of the equity and fixed income markets had been positive.

“Our assessment is that there will continue to be great uncertainty in the markets,” she continued.

“Against this background, it feels satisfactory that we have spread the risks as much as possible between different types of assets and markets, between listed and unlisted assets and between different management models.

“Our view is that over time this creates a good and stable return in line with our long-term mission.

"Since its inception, the Second AP Fund's return has exceeded the fund's long-term return assumption and has thus contributed positively to the stability of the pension system.

“In the past ten years, the fund's average return has been 7.5 per cent."

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