Swedish premium pension fund AP7 returned 16.1 per cent on its investments in the first half of 2024, its half-year report has revealed.

The average annual return for AP7 has been 13.5 per cent over the past 10 years and 14 percent since 2010, when AP7 Såfa introduced.

The majority of AP7 savers are in the default AP7 Såfa, which consists of the funds AP7 Aktiefond and AP7 Räntefond.

AP7 Aktiefond returned 17.8 per cent during the first six months of the year, corresponding to SEK 177 billion.

The majority of the capital in AP7 Aktiefond is invested in line with the global index, which includes large and medium-sized companies in developed and emerging markets.

AP7 noted that the strong performance of equity markets during H1 2024 benefited AP7 Aktiefond’s returns.

Meanwhile, AP7 Räntefond returned 1.2 per cent during the first half of the year, corresponding to SEK 1.4 billion.

This was primarily driven by falling interest rates since May, AP7 said, with the Riksbank signaling that further interest rate cuts were on the horizon, changing the markets view of future trends.

The share of green bonds in AP7 Räntefond increased to 39 per cent in H1 2024, corresponding to SEK 44.5bn, with AP7 aiming for a share of 50 per cent by 2025.

“In summary, we can add another fine six months to the history that has built a long-term high return for AP7's savers,” commented AP7 CEO, Pål Bergström.

“With a basic philosophy that is firmly in place, we also continue to develop AP7 so that the pre-selection in the premium pension continues to be a safe alternative that moves in step with the changes taking place in the outside world and that creates long-term value for our savers.”

AP7 head of asset management, Lena Fahlén, added: “The first half of the year has been marked by rising stock markets, sideways interest rate trends and a weaker krona, which has been favourable for AP7's savers.

“During the late summer it became significantly more turbulent and looking ahead there is no shortage of clouds of worry, not least in the geopolitical area."

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