Enabling return and stewardship
Nearly half of AP3’s assets are invested in stock markets worldwide. Equity investments have long been a central part of AP3’s management model, and the fund has several experienced employees in the area. The group’s strategy of actively managing capital provides good opportunities for effective corporate governance for long-term value creation.
Investment with market risk
Global stock markets are an important source of AP3’s returns but also periodically contribute to value losses in the portfolio. The risk partly explains the higher return that equity investments provide over time. Investing in different geographies, sectors and companies also provides good opportunities to take part in economic growth and new innovations.
As of 12/31/2022
Active management for long-term value creation
As a long-term investor, AP3 monitors and analyzes societal changes and economic trends that affect companies’ opportunities for value creation. Active management aims to adjust the exposure to different parts of the market and to buy or sell individual companies in order to generate a higher return on the portfolio over time. It entails a great deal of responsibility but also opportunities to influence the development of individual companies and society at large, something that AP3, as a responsible investor and shareholder, does through its sustainability work. The equities department at AP3 has a clear strategic focus on an high degree of internally managed capital that are supplemented by external mandates, with a focus on emerging markets and smaller companies outside Sweden.
Listed shares - geographical distribution as of 12/31/2022
Internal / external management per region, as of 12/31/2022
|Internal management||External management|
Spotlight on corporate stewardship
In AP3’s experience, companies which are well managed produce higher risk-adjusted returns over time. Successful integration of sustainability into a company’s business operations boosts competitiveness and profitability. Equity markets also value such companies more highly for reasons of quality and stability. Together with governance and sustainability managers, AP3’s portfolio managers in the equities group takes an active part in the dialogue with the companies to bring about change in the right direction.
Swedish equities – effective corporate governance and good investment opportunities
Swedish equities accounts for a substantial part of the Fund’s equity portfolio. Swedish companies are highly competitive in the global market place across sectors. AP3 has a home bias in listed equity investments, allocating a larger share of the Fund’s assets to Swedish equities than warranted by its share of global market capitalization. This choice is made because AP3’s portfolio managers have good knowledge of the Swedish market and are well placed to exercise effective corporate stewardship in Swedish companies. Moreover, the investment opportunities available in the Swedish market are relatively attractive.
As of 12/31/2022
Tailored global equity management with focus on sustainability
An internally managed portfolio with broad market exposure is a cost-effective strategy for taking part in global economic growth and innovations in companies worldwide. AP3’s global management mandate also complements the regional portfolios through an increased exchange of information and analysis within the management group. The number of portfolio managers on AP3 with a focus on international shares has increased with a positive contribution to the fund’s return as a result. The market’s increased focus on sustainability not only reinforces the benefit of AP3’s sustainability work for the equity portfolio’s risk profile, but also highlights increased demands on companies for societal development in general. For global companies, AP3’s influence, together with other major owners, can sometimes be quite extensive.
As of 12/31/2022
More about AP3
Download AP3’s various securities holdings. For us, it is important to create long-term value when selecting investments and in the management of companies in the portfolio. […]
The following companies are excluded from AP3 investments. […]
Our investments are governed by the rules of the National Pension Insurance Funds (AP Funds) Act, partly in regard to how large a percentage of the capital may be invested in each type of asset. […]