The Third Swedish National Pension Fund (AP3) returned -5.8 per cent in 2022, down from 20.7 per cent the previous year, its annual report has revealed.

This equates to net losses of SEK 29.3bn during the year, after recording a positive net result of SEK 86.8bn in 2021.

The pension fund’s equity investments were the worst hit by poor economic conditions and returned -18 per cent in 2022, while its fixed income investments returned -8.3 per cent.

Despite these poorly performing asset classes, AP3’s alternatives investments saw a positive return of 8.9 per cent, primarily due to investments in infrastructure and forestry.

Its real return after expenses was -16.1 per cent, down from a positive real return of 16.2 per cent the year prior.

AP3’s fund capital fell from SEK 502.3bn to SEK 468.4bn during the same period.

Its annual report showed that AP3 had made SEK 4.7bn of net payments to the pension system last year, down from SEK 7.5bn in 2021.

Since its inception in 2001, AP3 has generated an annual average return of 6.4 per cent, while its annualised return over 10 years and five years was 9.3 per cent and 8.1 per cent, respectively.

Commenting on the results, AP3 CEO, Staffan Hansén, said: “As an investor, we are always affected by major global movements in the financial markets, but given the general performance of markets over the year, the return should be regarded as reasonable.”

Earlier this week, Sweden's AP2 fund revealed that its return in 2022 was -6.7 per cent, down from a positive return of 16.3 per cent the previous year.

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