Looking ahead during a time of transition
The Fund’s CEO Kristin Magnusson Bernard comments:
Once again, we exceed our target of 3 per cent real returns, with returns over a rolling ten-year period averaging 5.7 per cent. Positive earnings contributions came from listed equities and from foreign exchange, which offset the negative return from unlisted real estate. Cost levels remained low with a expense ratio of 0.06 per cent.
Rising inflation rates have been the main concern of global investors for some time now. During the spring, the rising inflation gradually subsided in many developed countries but remained well above the inflation target levels set by the world’s central banks. Market sensitivity to unexpectedly high inflation outcomes over the period was high, which is not surprising given that the central banks´ austerity measures were historically dramatic both in terms of pace and scope. Despite this, labour markets in many countries showed consistently strong performance and many financial reports exceeded analysts’ expectations.
In the hesitant, but over time positive market sentiment, we gradually increased the allocation to equity and the duration, i.e sensitivity to interest rate, returning to just above neutral levels after holding a more conservative position last year. The real estate companies we own have retained their excellent credit ratings and continuous access to capital.We have also committed to maintain our financing strategies to uphold the trust from investors.
In this current moment, there are no signs that the tragic invasion of Ukraine is coming to an end any time soon. Geopolitical tensions and energy dependencies will likely continue to affect the near-term investment climate and our world is likely to be characterised by great uncertainty, substantial market volatility and high cost of capital. Going forward, expected market returns are likely to be somewhat lower, but hopefully more sustainable, with viable business models being strengthened, and higher prices bringing about prudent management of limited resources.
Maintaining stability and creating returns in such an environment requires good governance and management. During the year, our Board initiated a review of our ten-year old governance model and risk framework. The aim is to ensure that our risk-taking framework provides us with the best conditions possible to fulfil our statutory mandate and that it is on a par with the most professional pension funds around the world.
On the brink of a new era, I very much look forward to continuing to develop Första AP-fonden together with our Board and our employees.
Key ratios |
30 Jun 2023 |
30 Jun 2022 |
31 Dec 2022 |
Closing net assets, SEK bn |
446.4 |
420.1 |
421.2 |
Net investment income for the period, SEK bn |
27.8 |
-43.6 |
-39.9 |
Net flow to the pension system, SEK bn |
-2.6 |
-2.0 |
-4.7 |
Opening net assets, SEK bn |
421.2 |
465.8 |
465.8 |
Expense ratio, Operating expenses, %* |
0.06 |
0.06 |
0.05 |
Expense ratio, Commission expenses, %* |
0.00 |
0.01 |
0.01 |
Total Expense ratio, %* |
0.06 |
0.07 |
0.06 |
Return after expenses, % |
6.6 |
-9.4 |
-8.6 |
Real return after expenses, % |
5.3 |
-14,7 |
-20.9 |
Annualised return after expenses, 5 years, %** |
7.5 |
7.3 |
6.7 |
Annualised return after expenses, 10 years, %** |
8.4 |
8.7 |
8.1 |
Real annualised return after expenses, 10 years, %** |
5.7 |
6,9 |
5.6 |
* In the six-month interim report, the expense ratio is calculated as the full-year effect.
** In the six-month interim report, the annualised return is calculated for 5 and 10 years respectively
Read the full half year report 2023 here.
Contacts
Kristin Magnusson BernardCEOAP1
Tel:+46 (0)8-566 202 00Sara ChristensenHead of CommunicationsAP1
Tel:46 (0)70-968 12 50sara.christensen@ap1.seImages
Documents
About Första AP-fonden
Första AP-fonden (AP1)
Första AP-fonden (AP1) is one of five pension funds in the Swedish national income pension system (the AP Funds). AP1 has assets under management of SEK 446 billion (30 June 2023) in a portfolio consisting of listed equities, fixed income securities, currency, real estate, hedge funds, private equity funds, infrastructure and high yield. Investments are made worldwide. AP1 is a long-term investor and an active, engaged owner. As an owner the Fund imposes stringent demands in the areas of Environment, Social and Governance. www.ap1.se
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Latest releases from Första AP-fonden
On the brink of a new era22.2.2024 08:50:00 CET | Press release
Global fixed-income and equity markets recovered in 2023, after the sharp market downturns of the previous year. The year alternated between substantial upturns and sharp market downturns as investors tried to assess interpret the situation, and deal with the increased volatility. With carefully considered portfolio positions and a steady focus on implementation, Första AP-fonden achieved a return of 9.1 per cent, which corresponds to net investment income of SEK 38.0 billion.
På tröskeln till en ny tid22.2.2024 08:50:00 CET | Pressmeddelande
Globala ränte- och aktiemarknader återhämtade sig under 2023 från de kraftiga marknadsfallen föregående år. Under året växlade betydande uppgångar med kraftiga marknadsfall när investerare försökte tolka det svårbedömda läget och hantera den ökade volatiliteten. Med en noga övervägd portföljpositionering och ett fokuserat genomförande nådde Första AP-fondens avkastning 9,1 procent, vilket motsvarar ett resultat på 38,0 miljarder kronor.
Framåtblick i brytningstid20.7.2023 09:00:00 CEST | Pressmeddelande
Globala ränte- och aktiemarknader återhämtade sig under första halvåret 2023 från de kraftiga marknadsfallen föregående år. Riskbilden tycktes svårtolkad för världens investerare och mellan långa perioder av stiltje växte de trevande uppgångarna nästan obemärkt i styrka. Trots en osäker och volatil marknad bidrog Första AP-fonden (AP1) positivt till stabilitet i inkomstpensionssystemet med en avkastning på 6,6% och redovisade ett resultat på 27,8 miljarder kronor. Det förvaltade kapitalet uppgick vid halvårsskiftet till 446,4 miljarder kronor.
Anna Magnusson appointed new Chief Active Ownership Officer at Första AP-fonden22.3.2023 10:00:00 CET | Press release
Anna Magnusson has been appointed the new Chief Active Ownership Officer at Första AP-fonden (AP1). Anna comes from a role as specialist in corporate governance at Alecta and will take up her position at AP1 on June 1st, 2023.
Anna Magnusson ny ägaransvarig på Första AP-fonden22.3.2023 10:00:00 CET | Pressmeddelande
Anna Magnusson har utsetts till ny ägaransvarig på Första AP-fonden (AP1). Anna kommer närmast från en roll som specialist inom ägarstyrning på Alecta och tillträder sin befattning på AP1 1 juni 2023.
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