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AP3 introduces fundamental indexing

AP3 is enhancing its asset management operations by introducing fundamental indexing as a new form of management. The Fund will use the new FTSE GWA *) fundamental index, which covers European large cap and mid cap companies including UK. AP3 is the first European pension fund to adopt the GWA index.

An initial portfolio of SEK 2 billion will be managed internally using the FTSE GWA Europe Index based on GWA’s wealth weighted methodology.

Unlike traditional indices, a fundamental index is not market-weighted. In practice, this means that the index is not weighted according to market expectations of company performance but instead captures reported fundamentals. The FTSE GWA is weighted on the basis of three variables: Net profits, cash flow and book value.

Kerim Kaskal, AP3 Head of Asset Management, said: “We look continually for new sources of return and instruments to develop our asset management operations. Fundamental indices are ideal for AP3 as a long-term investor because they have been shown to outperform market-weighted indices over longer periods of time.”

*) Global Wealth Allocation

For further information contact
Christina Kusoffsky Hillesöy, Communications Manager, phone: +46 8 555 17 123,
mobile: +46 709 517223; christina.hillesoy@ap3.se
Kerim Kaskal, Head of Asset Management, phone +46 8555 17 164, kerim.kaskal@ap3.se