The Third Swedish National Pension Fund (AP3) posted a net profit of SEK 8.2 billion in the first half of 2004, equivalent to a total return of 5.7 %.
At 30 June, the market value of AP3’s fund capital stood at SEK 151.9 billion, an increase including capital inflows, of SEK 9.4 billion.
The Fund’s currency risk at 30 June amounted to 19.3% of the total portfolio, compared to 9.0% at the start of the year. The increase reflects the Board’s decision to increase the level of currency exposure in the Fund’s reference portfolio.
The best-performing assets in AP3’s portfolio, in absolute terms, were Swedish and Japanese equities, US corporate bonds, and index-linked bonds. In the equity markets, small and medium-sized stocks performed best. AP3’s private equity investments also generated strong returns in the form of distributed capital gains.
Sven Askenberger, Acting CEO, said: “Thanks to our strategy of holding a broad mix of assets, AP3 has been in a strong position to benefit from market trends. It is pleasing to be able to report good growth in our pension capital.”
During the spring AP3 took several new steps towards more active fund management and an even broader portfolio in order to increase returns and improve risk diversification. For instance, the Fund introduced new external asset management mandates for US and European small-cap companies, resulting in an increase in the number of companies in which the Fund invests from 1,500 to close to 6,000.
Kerstin Hessius, AP3’s new CEO, takes up her post on 1 September.