Swedish pension giant makes equities bet as recession risks fade; turns down biggest IPO in history

One of Sweden’s biggest pension providers is increasing its exposure to equities after fears of a global recession ebb.

Photo: PR / AMF

Bjorn Lind, who oversees EUR 13bn as the head of asset allocation at AMF’s fund unit, says it has raised the proportion of stocks in its portfolios since late August after keeping it at about 60 percent for most of this year.

Lind, who manages AMF’s global funds and the AMF Balanced Fund, said an ideal level would be about two thirds and gradually plans to raise the equities exposure to that level. Lind’s bet stems from an improving outlook for the global economy, after economic data improved, central banks “softened,” geopolitics “calmed down a bit” and the risk of a hard Brexit decreased, he said in an interview in Stockholm.

The fund manager also said that while the latest corporate earnings weren’t “that great,” they still beat expectations. “We are actually seeing things moving in the right direction,” Lind said. “The recession risk that we saw is significantly lower now.”

AMF is shrugging off concerns that stock market gains may be overdone given the risks of an economic slowdown. The benchmark OMX Stockholm 30 Index of AMF’s home market reached a new historical high this month even as the country’s economy is slowing rapidly, with slumping confidence levels and rising unemployment.

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