The Fourth Swedish National Pension Fund (AP4) returned -11.9 per cent on its investments after costs in 2022, its annual report has shown.

This corresponded to a net result for the year of SEK -62.5bn, with the pension fund observing losses on most asset classes due to rising interest rates and falling asset values.

By comparison, AP4 had a positive return of 19.2 per cent and a net result of SEK 85.7bn in 2021.

After a net transfer of SEK 4.7bn to the pension system during the year, AP4’s fund capital amounted to SEK 460.5bn at the end of 2022, down from SEK 527.6bn at the end of the previous year.

“In this context it is important to note that AP4 is a very long-term investor,” said AP4 CEO, Niklas Ekvall.

“Measured over a slightly longer time perspective, including 2021, AP4’s portfolio has generated a positive result of more than SEK 23bn.

“If we stretch out the time horizon, to five and 10 years, which is more relevant for a long-term investor like AP4, we can report favourable annualised portfolio returns of 6.9 per cent and 9.2 per cent, respectively.”

The pension fund’s annual report also revealed that its portfolio’s CO2 emissions decreased by 3 per cent in 2022, and the CO2 emissions had fallen by 61 per cent since 2010.

“AP4’s work on managing climate risks in the investment portfolio continue to generate results over time,” Ekvall stated.

“AP4 continuously analyses sustainability trends and actively searches for investments that it deems will contribute to and benefit from the transition to a sustainable society.

“During 2022, AP4 made new thematic sustainability investments amounting to SEK 7.4bn."

During the year, the pension fund served on 46 nomination committees.

Meanwhile, its cost level for the year was 0.08 per cent of managed assets, with Ekvall saying that the pension fund “strives to conduct as cost-efficient pension management as possible”.

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