Mandate
The funds’ activities are regulated by the Swedish National Pension Funds Act (1999:2000:46), whose provisions include: “The First, Second, Third and Fourth Swedish National Pension Funds are charged with managing assets to provide the maximum benefit for the income-based retirement pension system.

At the chosen risk level, the funds’ assets should be invested so as to secure a high long-term high return. The funds’ overall investment risk should be low.” (Ch 4, §1, Swedish National Pension Funds Act.)

How do the funds invest?
The funds’ investment rules are set by the Swedish parliament. They are highly flexible and are based on a
core requirement: that the securities in which the funds invest must be liquid. This means that it must be
possible to buy or sell them.

Investment rules

• Investments may be made in all instruments occurring in the capital market that are quoted and marketable.
• At least 30 per cent of Fund assets are to be invested in interest-bearing securities with low risk.
• A maximum of 40 per cent of assets may be exposed to currency risk.
• Each Fund may own a maximum of 10 per cent of the voting power in a single listed company.
• A maximum of 5 per cent of fund assets may be invested in unlisted securities. These investments must be made indirectly via securities funds or the like.
• At least 10 per cent of Fund assets are to be managed by external asset managers.