The first to fourth Swedish AP funds added SEK 142bn to the value of the Swedish income pension system in 2023, equating to a return of 8.1 per cent (after costs) combined.

The average return of the AP funds over the last five and ten years amounts to 8.5 and 8 per cent per year, respectively, compared with the income index’s performance of 3.5 and 2.8 per cent per year over the corresponding periods. The income index is used to calculate pensions and pension rights in the income pension system. When the returns of the AP funds exceed the performance of the income index, the AP funds contribute to the strength of the pension system.

At the end of 2023, the total fund assets of the AP funds amounted to SEK 1,880bn. During 2023, the AP funds paid out SEK 19bn to cover the pension system’s deficit. Since they were launched in 2001, the AP funds have made net payments of SEK 272bn to the pension system. At the same time, their returns have contributed to the financial strength of the pension system, and the AP funds’ share of the pension system now accounts for almost 16 per cent of pension assets, compared with 10 per cent in 2001.

In 2023, total management costs amounted to 0.08 per cent of assets under management and the AP funds are cost-effective in international benchmarking. During the year, the AP funds continued with their efforts to achieve portfolios with net zero emissions. In 2023, the carbon emissions of the portfolios were reduced by a further 8 per cent.

In a joint statement, AP1 CEO, Kristin Magnusson Bernard, AP2 CEO, Eva Halvarsson, AP3 CEO, Staffan Hansén and AP4 CEO, Niklas Ekvall, said: “Our collective result for 2023 shows that all of us, with our different management strategies, navigated well in unsettled financial markets and can summarise a stable year. This means that the AP funds have made a strong contribution to the stability of the pension system.

“From a 10-year perspective, the return has been high, averaging 8 per cent per year, compared with the average increase of 2.8 per cent per year for the income index. We are recognised internationally as a role model in sustainability and have continued to develop this important aspect via both responsible investment and responsible ownership.”

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