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AP3, Third Swedish National Pension Fund, continues to report strong results

Press release, 23 February 2018

Highlights of 2017

  • AP3 reported a net result of SEK 28,239 million (27,981) for the 12 months ending on 31 December 2017.
  • Returns totalled 8.9% (9.5) before expenses and 8.8% (9.4) after expenses.
  • AP3 made payments of SEK 7,375 million (6,637) to the pension system during the year.
  • Fund capital at year-end stood at SEK 345,239 million (324,375).
  • The Fund’s asset management cost ratio was 0.10% (0.12), of which operating expenses were 0.06% (0.06).
  • During 2017, the Fund outperformed the benchmark LSP portfolio, by 2.1 percentage points after expenses. Since the LSP portfolio was introduced in 2012, AP3 has outperformed LSP by 22 percentage points after expenses.
  • Over the past five years, AP3’s average return was 10.5% per year. During the same period, the income index has been written up by 2.4% per year.
  • Since its inception in 2001, AP3 has outperformed the Fund’s long-term target of a four per cent real return. The return on capital was 5.9% per year after expenses and after deducting for the inflation rate of 4.6% per year.
  • AP3’s strategic sustainability investments amount to SEK 25 billion, which is above the target of SEK 20 billion for 2018 set in 2014.

“The return for the year totalling 8.8% means yet another year of substantial contributions to the pension system. Over the past five years, the Fund’s returns have been just over 8% higher than income index per year,” says Kerstin Hessius, CEO, AP3.

“Over the year, we worked to contain costs by reducing the share of hedge funds in the portfolio, and we have moved into smaller premises. We also intensified our cooperation among the AP funds by increasing the number of cooperation groups,” Kerstin Hessius continues.

 

Summary of AP3’s financial results for 2017:

AP3 key data 2017 2016
Fund capital at 31 December, SEK m 345,239 324,375
Net result for the year, SEK m 28,239 27,981
Net flow to the pension system, SEK m -7,375 -6,637
Fund capital at 1 January, SEK m 324,375 303,031
Asset management cost ratio – operating expenses, % 0.06 0.06
Asset management cost ratio incl. commission expenses, % 0.10 0.12
Return after expenses, % 8.8 9.4
Annualised return after expenses, 5 years, % 10.5 10.9
Annualised return after expenses, 10 years, % 6.1 5.7

 

Download the 2017 annual report in Swedish here: AP32017_årsredovisning

The AP3 Annual Report and Sustainability Report 2017 will be published in English during March 2018. Read more about AP3 at www.ap3.se.

 

For further information, please contact:

Kerstin Hessius, CEO, +46 8 555 17 100

Lil Larås Lindgren, Head of Communications, +46 8 555 17 123, 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 345.2 billion of assets under management as at 31 December 2017. AP3 is tasked by Parliament with generating maximum possible benefit for the pension system by managing its fund capital in order to deliver strong investment returns at a low level of risk.

AP3’s average annual return on capital since its inception in 2001 stands at 5.9% after expenses. The income index, the benchmark used to keep pensions and pension credits in line with inflation, increased by an annual average of 3.0% during this period.