Fixed income and currencies
To manage risk and spur green transition
The fixed income and FX team at AP3 manages the Fund’s fixed income investments, which are subdivided into government, inflation-linked and corporate securities. The team is also responsible for currency management, including hedging, active currency risk-taking and the treasury function.
Fixed income investments
AP3 manages the bond portfolio internally and actively. A large portion of the investments are liquid, which is a prerequisite for active fixed income management. The current low interest rate environment means that expected returns are very low, making it even more important to invest cost-efficiently.
Fixed income investments
Sustainable bonds – maintaining focus on the target
AP3 aims to allocate at least 25% of its fixed income portfolio to sustainable bonds. This is an effective way of contributing to a better climate while continuing to generate returns in line with expectations for the bond market.
AP3 defines sustainable bonds as green bonds and other investments that provide measurable environmental or social benefits.
The ability to attract capital by issuing green bonds also has an effect on the issuer’s focus and commitment to environmental issues. AP3 has created a diversified portfolio of green bonds invested. Each green investment is verified by the sustainability team that is separate from the fixed income team in order to ensure that the green bonds really are green. AP3 has also contributed to the development of the green bond market through its real estate companies Vasakronan and Hemsö, which issue green bonds to raise finance. In 2013, Vasakronan became the first company in the world to issue a green bond.
The bond portfolio allocation, % as of December 31, 2025.
Currencies
The currency asset class relates to AP3’s net income from currency exposure after hedging against changes in currency values relative to the Swedish krona and from direct currency strategies. Currency positions are taken to increase returns and to reduce risk in the overall portfolio.
More about the AP3 portfolio
Five-year summary
AP3’s policy for responsible investments describes the overall framework for AP3’s work with sustainability and ownership governance.
Read more
Investing in real estate offers potential for relatively stable returns and a degree of protection towards inflation.
AP3 has strong reasons for promoting a sustainable development because it is a prerequisite for achieving high investment returns over time.
AP3 has been investing in different types of insurance-, climate- and weather-related securities since 2008. Holdings include catastrophe bonds, which are traded outside the traditional financial markets. Returns on these instruments have a low correlation with other investments, which means they help to diversify the portfolio.