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Third Swedish National Pension Fund (AP3), reports strong half-year result

AP3 recorded a total return of 5.4% after expenses in the first six months of 2017, lifting the Fund’s annual average return in the last five years to 11.1%. The net result was SEK 17.5 billion and fund capital rose by SEK 13.8 billion on 1 January to SEK 338 billion on 30 June. Costs were low at 0.11%. AP3 continued to expand its green bond holdings, which are now worth close to SEK 11 billion. During the spring, AP3 became a lead investor in a new type of catastrophe bond issued by the World Bank to combat pandemics in the world’s poorest countries.

Kerstin Hessius, AP3 CEO, said: “Our net result of SEK 17.5 billion for the first six months of the year was a strong performance, driven primarily by returns on equities and our Swedish real estate holdings. We continued to build our investments in green bonds, which now account for 13% of the fixed income portfolio.”

Financial summary AP3 1 January – 30 June 2017

  • AP3 recorded a net result of SEK 17,491 million (4,206) for the first six months of 2017.
  • Fund capital rose to SEK 338,179 million, an increase of SEK 13,804 million (990) from the start of the year. Fund capital stood at SEK 324,375 million on 1 January.
  • AP3 paid SEK 3,687 million (3,216) to the Swedish Pensions Agency during the period to cover a shortfall between incoming pension contributions and outgoing pensions and to meet pension system costs.
  • Return totalled 5.5% (1.5) before expenses and 5.4% (1.4) after expenses. The Equities and Inflation risk categories made the largest contributions to this performance.
  • The asset management cost ratio was 0.11% (0.12), of which operating expenses were 0.06% (0.06).
  • AP3’s costs are 31% lower than those of comparable funds monitored by Canadian company CEM Benchmarking, which conducts an annual global analysis of pension fund cost profiles.
  • Return during the period outperformed the LSP benchmark portfolio by 2.0 percentage points.
  • AP3’s holdings of green bonds totalled SEK 10.9 billion at 30 June and accounted for 13% of the fixed income portfolio.
  • The Fund was a lead investor in a new type of catastrophe bond issued by the World Bank to combat pandemics in the world’s poorest countries.
  • AP3’s average annual return stands at 11.1% for the last five years and 5.6% for the last 10 years.

Awards to AP3 during the period:

  • AP3’s anchor investment in LBBW Immobilien under Patrizia’s management won two awards from PropertyEU Magazine. AP3, which holds a 25% equity stake in LBBW Immobilien, won the Best Residential Deal of the Decade award and also Award of the Decade, which was nominated by readers.
  • The AP funds and Dutch investors won an international Responsible Investors award for their joint statement supporting the UN global sustainable development goals.

Proposals to amend the investment rules of AP1, AP2, AP3 and AP4 are currently out for consultation prior to their scheduled introduction on 1 July 2018.

Kerstin Hessius said: “We welcome the proposed changes, which will improve our ability to generate positive returns. We are now analysing the proposals and will submit our response in October.”


Summary of AP3’s interim results 2017

30/6/2017 30/6/2016 31/12/2016
Fund capital at 30 June 2017, SEK bn 338.2 304.0 324.4
Net result for the period, SEK bn 17.5 4.2 28.0
Net payment to the pension system, SEK bn 3.7 3.2 6.6
Fund capital at 1 January 2017, SEK bn 324.4 303.0 303.0
Return after expenses, % 5.4 1.4 9.4
Real return after expenses, % 4.7 0.7 7.6
Asset management cost ratio, operating expenses, percentage of assets under management * 0.06 0.06 0.06
Asset management cost ratio, commission expenses, percentage of assets under management* 0.05 0.06 0.06
Total asset management cost ratio, percentage of assets under management* 0.11 0.12 0.12
Annualised return after expenses, 5.0 yrs, % 11.1 10.9
Annualised return after expenses, 10.0 yrs, % 5.6 5.7
Annualised return after expenses, 10.0 yrs, % 4.5

* The interim report shows the asset management cost ratio on a full-year basis

** The interim report shows annualised return for 10.0 and 5.0 years respectively


The full report as PDF Interim Report 2017 and is also available at


For further information, please contact:

Kerstin Hessius, AP3 CEO, +46 8 555 171 00
Lil Larås Lindgren, AP3 Head of Communications, +46 8 555 171 23,


The Third Swedish National Pension Fund (AP3) is one of five funds tasked with managing the Swedish state income pension system’s capital buffer to achieve an optimal return for the system. The fund had assets of SEK 338 billion as at 30 June 2017. AP3 has contributed SEK 19 billion to help cover deficits arising within the system since it was launched in 2001. The Fund had assets of SEK 134 billion at inception. Since 2001, AP3 has generated an annual average return of 5.9%.


AP3 reported on its sustainable development engagements in the 2016 annual report and sustainability report, which can be downloaded from