AMWatch

AP1 hits double-digit returns after first half of 2021

The strong return shows that fund's constructive view of risk-taking was well rewarded in the first half of the year, AP1 CEO Kristin Magnusson Bernard explains.

AP1's CEO Kristin Magnusson Bernard. | Photo: AP1/PR

Sweden's First National Pension Fund (AP1) generated an 11 percent return before expenses and 10.9 percent after expenses during the first half of this year.

"As a long-term investor with a strong balance sheet, AP1 has good capacity to bear risk effectively. The Fund's constructive view of risk-taking was well rewarded financially during the first six months of the year. We have been well-positioned to benefit from the prevailing market situation, and most asset classes in the portfolio contributed positively," CEO Kristin Magnusson Bernard writes in a comment.

"Our considerable exposure to global and Swedish equities, where especially the latter has shown outstanding performance year-to-date, was the main return driver, although real estate and other alternative investments also contributed positively," she continues.

Over the past ten years, AP1 has delivered an average yearly return of 8 percent.

Last week, AP4 was the first of the buffer funds to publish figures for the first half of the year. AP4 delivered a 10 percent return before costs and 9.9 percent after costs.

In the comments connected to the half-year report, AP1's CEO explains that while risk-taking has been rewarded financially during the spring, the overall upwards market direction has not been without its hiccups.

"At AP1, we look forward to an exciting remainder of the year, where we aim to respond nimbly to changes in market direction while being firmly focused on our long-term mission: to create high returns through exemplary asset management, at low cost," Magnusson Bernard writes.

She also comments on sustainability and especially "green" investments, where AP1 is fully focused on utilizing this trend to fulfill its objectives.

During spring 2021, AP1 invested in Northvolt jointly with AP2, AP3 and AP4, for USD 400m (EUR 340m).

"The Northvolt investment is a good example of how we as a long-term investor can invest in companies that might serve as a transformative and profitable force in the global climate transition and thus contribute positively both to the Swedish income pension system and to society at large," Magnusson Bernard writes.

A total of SEK 4.2bn (EUR 410m) has been transferred to the Swedish income pension system, and at the end of June 2021, AP1 had SEK 431.5bn (EUR 42.1bn) in assets under management.

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