Swedish pension fund AP4 returned 6 per cent after costs on its investments in the first half of 2023, its half-year report has revealed.

This represents an 18.6 percentage point improvement year-on-year, after the pension fund returned -12.6 per cent in H1 2022.

AP4 CEO, Niklas Ekvall, explained that the strong performance of equity markets at the beginning of 2023 had been favourable for AP4’s portfolio.

Its annualised return over five and 10 years was 7.4 per cent and 9.2 per cent, respectively.

The pension fund’s net result increased year-on-year, from SEK -66.6bn in H1 2022 to SEK 27.7 in H2 2023.

According to the report, AP4’s fund capital, as at 30 June 2023, was SEK 485.6bn, up from SEK 460.5bn at the start of the year.

During the first half of 2023, AP4 paid SEK 2.6bn to the pension system, up from SEK 2bn during the same period in 2022.

"The financial markets continue to be characterised by great uncertainty," Ekvall stated.

"Having said this, during the first six months of the year we saw generally positive performance in the world’s stock markets, with a broad, global equity index rising by 14 per cent.

"This result represents a slight recovery from the weak 2022.

"AP4 continuously analyses sustainability trends and seeks investment opportunities that over time are judged to support the transition to a sustainable society as well as provide a high financial return, for example in areas such as fossil-free transport, green buildings, infrastructure and fossil phase-out in energy systems.

"Over the past three years, AP4 has invested close to SEK 30bn in such thematic sustainability investments and our ambition is to gradually increase the allocation to this type of investment at the rate at which we can identify those with good potential."

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