Swedish premium pension provider AP7 achieved an average return of 27.3 per cent in 2024 for its 5.9 million pension savers, its annual report has revealed.

Its equity fund performed particularly well, with a return of 29.8 per cent, equivalent to SEK 295bn.

Meanwhile, the more cautious fixed income fund returned 3.1 per cent in 2024.

AP7's managed capital amounted to SEK 1,440bn at the end of the year, of which SEK 1,289bn was in the equity fund and SEK 151bn was in the fixed income fund.

“If we look back at 2024, on the one hand, it was a year in which the security situation in the world deteriorated further and the forces that want to slow down or even stop the transition to a carbon-neutral world grew stronger,” commented AP7 CEO, Pål Bergström.

“On the other hand, it was a year in which AP7 Equity Fund performed exceptionally well.”

AP7’s sustainability report revealed that its investments in green bonds increased to SEK 76bn in 2024, making up 50 per cent of its fixed income fund, compared to 33 per cent in 2023.

“A central tool for AP7 in its work to contribute to sustainable development is the transition portfolio that is being built,” said Bergström.

“Here, we invest, among other things, in companies that are lagging behind in their climate work, but where we as active owners have good opportunities to accelerate their transition and at the same time deliver on our return requirements.

“In addition to an external management mandate in the transition portfolio, we have initiated an internally managed mandate that will begin its investments in 2025.”

Looking ahead to 2025, AP7 noted that its focus was to continue the development of its investment processes to fully integrate sustainability, including by developing sustainability goals and activities for all its asset classes.

“On the equity side, we will continue to work on developing AP7's internal equity management,” stated AP7 deputy CEO and chief investment officer, Lena Fahlén.

“In parallel, we will closely monitor and analyse the structural changes and challenges we face, such as climate change, artificial intelligence, demographic changes and geopolitics.

“We need to respond to these changes and adapt the portfolio to these long-term themes.

“During the year, a deeper analysis of our savers and the generational profile will also be carried out to ensure that the Såfa product continues to be effectively designed.”

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