Första AP-fonden

Long-term focus amid global uncertainty


The first half of 2022 was marked by Russia’s invasion of Ukraine. The war, in conjunction with lingering pandemic lockdowns, disrupted supply chains and led to a shortage of energy and intermediate goods. Soaring inflation prompted global central banks to tighten their monetary policies more than previously expected. Uncertainty over future developments and the complex risk landscape led to a sharp and simultaneous drop in fixed income and equity markets, a historically unusual pattern.

Despite uncertainty and volatile markets, Första AP-fonden (AP1) has continued to deliver positive returns on its investments in foreign exchange and alternative assets such as private equity, real estate and infrastructure. The large falls in global fixed income and equities markets could however not be parried by the fund. AP1’s portfolio return for the first half of 2022 amounted to minus 9.4 per cent after expenses. In total, SEK 2 billion was transferred to the income pension system and at mid-2022 the Fund had assets under management of SEK 420 billion.

The Fund’s CEO Kristin Magnusson Bernard comments:

“Russia’s invasion of Ukraine has brought war to our doorstep, and Europe is dealing with its most severe refugee crisis since World War II. In these negative circumstances, our focus has been on protecting our portfolio by lowering the allocation to listed equities, reducing duration, optimising our liquidity management and taking advantage of the strong US dollar as allowed by our hedging requirements. Given that the majority of the capital in our portfolio is invested in listed assets, in the short term it is more complicated for the Fund to parry a market drop of the magnitude we have seen in the last six months. In a very challenging market we have successfully managed to protect our portfolio relative to benchmarks and report a return of minus 9.4 per cent for the first half of 2022, while the Stockholm Stock Exchange (OMXSPI)  is down by minus 30 per cent and global market indices (MSCI World) have declined by 20 per cent over the same period. As a long-term investor we constantly monitor investment opportunities that may arise for both listed and alternative assets when other investors are prompted to sell. We continuously push ourselves to learn from previous periods of market turbulence and to question historic patterns so that we can act in a way that creates value. 

During crises, the necessary management of the immediate fallout can mean that the focus on long-term issues is lost, or that short-term decisions even aggravate structural challenges. The war in Ukraine, the lingering effects of the pandemic, soaring inflation rates and the ensuing global market turbulence have given rise to fears that efforts to achieve the climate transition will wane. On the contrary, there are many signs that the Ukraine invasion in particular will have the opposite effect as it has exposed vulnerabilities in the form of energy dependencies and energy security as well as the social and environmental trade-offs that a faster phasing out of fossil fuels requires. Other transition-critical elements – technological advancements in production, distribution and storage of energy, responsible mining of essential metals and minerals, concession processes and regulations that fulfil climate, environmental and social needs – are all now being discussed intensively by political decision-makers, business representatives and civil society. As a long-term investor we closely monitor developments so that we can quickly detect and ready ourselves for the business opportunities we believe will arise.

Geopolitical tensions, energy dependencies and their effects on inflation are likely to affect the investment climate for a long time to come. In the near term, pandemic lockdowns in China are likely to continue impacting global supply chains. Market expectations on the future actions of central banks have not yet stabilised, which is normally a prerequisite for global stock markets to recover in a more sustained manner. There is also particular uncertainty about how markets and economies will react to central banks’ shift to a tighter monetary policy, partly through a series of rapid policy rate increases from very low levels, and partly through pruning their balance sheets in various ways after a very long period of expansive monetary policy. Over the longer term though, all the efforts that are now being put into building more profitable and sustainable companies and to moderating risk-taking on global financial markets could foster greater resilience and positive outcomes.

As a long-term investor with a mandate to act in an exemplary and responsible way, we also want to foster sustainable development in more complex situations. The war in Ukraine has given rise to many questions for investors with ESG ambitions. One of the important trade-offs that comes with our mandate is to assess when we can also handle more challenging investments in a trustworthy manner, and when the risk landscape dictates that we should abstain instead. Given that, after Russia’s invasion of Ukraine, and no longer deem investments in Russian assets to be compatible with our mandate, we decided to sell the small equity holdings we had and not make any new investments.

Our mandate is to create high returns with exemplary management at low costs, and according to the government’s annual evaluation of our operations we have made a positive contribution to the long-term financing of the national income pension system. We have also worked actively to achieve our ESG goals and according to the government’s assessment, in 2021 we fulfilled our statutory objective of managing the Fund’s assets in an exemplary manner.

In spite of the negative market development during the first half of the year, we are confident that we can deliver on our purpose; to maximise long-term returns while ensuring balanced risk-taking, high efficiency and sustainability so as to build retirement security for us all, today and for the future."

Key ratios

30 Jun 2022

30 Jun 2021

31 Dec 2021

Closing net assets, SEK bn




Net investment income for the period, SEK bn




Net flow to the pension system, SEK bn




Opening net assets, SEK bn




Expense ratio, Operating expenses, %*




Expense ratio, Commission expenses, %*




Total Expense ratio, %*




Return after expenses, %




Real return after expenses, %




Annualised return after expenses, 5 years, %**




Annualised return after expenses, 10 years, %**




Real annualised return after expenses, 10 years, %**




* 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

Download Första AP-fonden’s 2022 Interim Report here.



Kristin Magnusson Bernard, CEO AP1
Kristin Magnusson Bernard, CEO AP1



About Första AP-fonden

Första AP-fonden
Första AP-fonden
Regeringsgatan 67
111 56 Stockholm

08-566 202 00https://www.ap1.se/

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 420 billion (30 June 2022) 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

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