Sweden’s second AP fund (AP2) recorded a negative return of -6.7 per cent after costs in 2022, with losses of SEK -29.2bn, its 2022 annual report has revealed.

This is down from a positive return after costs of 16.3 per cent and a profit of SEK 62.3bn in 2021.

The pension fund stated that the 2022 result reflected the markets affected by war in Europe, alongside rising inflation and interest rates.

These market movements negatively affected AP2’s equity and fixed income assets, while its unlisted assets saw a positive return.

After the net outflow to the pension system of SEK -4.7bn, the fund capital amounted to SEK 407bn, down from SEK 441bn at the end of 2021.

The pension fund’s annualised return after costs over a 10-year period fell from 9.5 per cent at the end of 2021 to 7.4 per cent at the end of 2022.

"2022 has been a very turbulent year in several ways,” commented AP2 managing director, Eva Halvarsson.

“Both shares and interest-bearing assets fell in value partly as a result of higher interest rates.

“However, AP2's portfolio showed resilience and retreated by a relatively moderate -6.7 per cent compared to OMX Stockholm which during the same period went down by around -13 per cent and global indices such as MSCI World (excluding currency effects) went down by around -16 per cent.

“Our unlisted assets fared better than our listed ones, which we also expected them to do.

"It is for situations like the one that arose in 2022 that we have built our portfolio over time.

“We have placed great value on spreading the risks as far as possible between different types of asset classes and markets, between listed and unlisted assets and between different management models.

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

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