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AP3 half year / interim report 2020

Press release

August 26, 2020

The Covid-19 pandemic dramatically reshaped global economic growth prospects during the spring. The tide of uncertainty hit financial markets hard, though major financial support packages initiated by national governments and central banks helped to calm market nerves. A recovery has since taken shape, albeit one that differs widely between industries and sectors.

  • AP3 reported a net loss of SEK 3,090 million (profit: 36,511) for the first six months of 2020.
  • The total return was -0.8% (10.8) after expenses.
  • The annualised asset management cost ratio was 0.09% (0.10), of which operating expenses totalled 0.06% (0.06).
  • Fund capital rose to SEK 386,406 million (393,696 at 31 Dec 2019), a decrease of SEK 7,290 million.
  • SEK 4,200 million (3,040) was paid from fund capital to the Swedish Pensions Agency during the period to cover the difference between paid-in pension contributions and outgoing pensions and to meet pension system costs.
  • AP3 has generated an average annual return of 6.9% over the last five years and 8.4% over the last 10 years.
  • Return outperformed the LSP benchmark portfolio by 0.9 percentage points during the period.
  • AP3 voted at 1,070 company meetings, of which 71 were of Swedish investees. Read more about the Fund’s corporate governance engagements in the Stewardship Report.

AP3 CEO Kerstin Hessius commented: “AP3’s return of -0.8% for the first half of 2020 was satisfactory in difficult circumstances. The Fund’s crisis management was effective, and all employees did their utmost to reduce risk, size opportunities and manage our assets responsibly in an extremely challenging situation. Though neither the virus nor the economic uncertainty are yet behind us, we are probably past the worst in terms of financial market turbulence.”

Summary of AP3’s interim results at 30 June 2020

 30-06-202030-06-201931-12-2019
Fund capital at 30 June, SEK bn 386.4374.1393.7
Net result for the period, SEK bn-3.136.559.5
Net payment to the pension system, SEK bn4.23.06.5
Fund capital at 1 January, SEK bn393.7340.7340.7
Return after expenses, %-0.810.817.6
Real return after expenses, %-0.59.915.6
Asset management cost ratio, operating expenses, percentage of assets under management*0.060.060.06
Asset management cost ratio, commission expenses, percentage of assets under management*0.030.040.03
Total asset management cost ratio, percentage of assets under management*0.090.100.09
Annualised return after expenses, 5.0 years, %**6.98.68.5
Annualised return after expenses, 10.0 years, %**8.49.18.7
Annualised real return after expenses, 10.0 years, %**7.27.97.4
* The interim report measures the asset management cost ratio on a full-year basis
** The interim report also shows annualised return for 10.0 and 5.0 years respectively. 5.0 years

 

Download the AP3 Interim Report for 1 January to 30 June 2020 here>>

Download the AP3 Stewardship Report 2020 here >>

 

For any further information, please contact:

Lil Larås Lindgren, Head of Communications, Tel: +46 (0)8 555 17123 lil.lindgren@ap3.se

AP3 is one of five funds that manage capital on behalf of the Swedish state pension system. The Fund had SEK 386.4 billion of assets under management as at 30 June 2020. AP3 is tasked by Parliament with generating maximum possible benefit for the state pension system by managing its fund capital responsibly and delivering strong investment returns at a low level of risk.