The Fourth Swedish National Pension Fund (AP4) made a return of 9.6 per cent (after costs) in 2023, its full-year results have revealed.

With a profit of SEK 43.9bn, its fund capital increased to SEK 499.6bn as SEK 4.8bn was transferred to the pension system during the year.

AP4 CEO, Niklas Ekvall, said: "The good return that our portfolio has delivered is the result of the year's favourable financial markets and the ongoing management work we conducted during the year. To a significant extent, this is also due to our many years of work to continuously improve the portfolio's return and risk characteristics.”

He added that the fund’s annual average return since its inception in 1974 is 13 per cent.

With regard to AP4’s fees, Ekvall said the fund’s cost level in 2023 was 0.08 per cent of assets under management. “AP4 conducts cost-effective pension management, and in an international cost comparison, AP4's cost level was 37 per cent lower than that of corresponding pension funds internationally,” Ekvall said.

In addition, in 2023, the portfolio's carbon dioxide emissions decreased by 11 per cent compared to 2022 and AP4 has reduced emissions by a total of 65 per cent since 2010. AP4 has also served on 56 nomination committees during the year.

Ekvall said an increasing share of AP4's portfolio consists of investments with a specific focus on the sustainability transition.

“In 2023, AP4 carried out an extensive project to update our view of key sustainability trends. The ambition is to refine our tools and strengthen our expertise in order to identify investment opportunities that are expected to provide a good return in the long term, while making a tangible contribution to the transition. In 2023, AP4 made new thematic sustainability investments of SEK 7.6bn, and since 2020 these new investments amount to SEK 36.8bn," Ekvall concluded.

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