SWEDEN - Sweden's second national pension fund, AP2, continued its downward spiral with a near 4% dip in assets for 2001.
The fund is now banking on its ‘bargain buy’ investments to lift returns over the next 12 months.
Since its inception last January, AP2 has witnessed successive dips in its capital value, initally set at around SEK134bn. The fund described current figures as “satisfactory”.
Stockholm-based AP2 reported a negative return on invested assets of -3.7% during its first 12 months of operation. The fund's reference index noted a return of -5.4% for the same period.
Fund capital totalled SEK133.5bn at year-end 2001, compared with SEK134bn at the start of the year. Net inflows amounted to about SEK4.5bn.
Commenting on the report, Lars Idermark, AP2’s chief executive officer, said:
Given the extreme turbulence experienced by stock markets last year, both in Sweden and internationally, our return on invested assets must surely be deemed satisfactory.
[AP2] operates with an investment horizon of some 10 years, making the impact of a single weak year on the stock market relatively unimportant.”
During the first half of 2001, AP2's return amounted to -2.7%. At the end of June the value of the portfolio amounted to SEK132bn (EUR14bn), including net inflow of SEK2bn capital.
“In the long term, the fund should benefit from the fact that its share portfolio has been built up with shares purchased at, in our opinion, attractive initial values, added Idermark.
By Madhu Kalia
The Pension Protection Fund (PPF) is consulting on proposals to charge a "risk reflective" levy for commercial defined benefit (DB) consolidation vehicles.
The funding gap across FTSE 350 schemes could be slashed by as much as £275bn if schemes look beyond traditional ways of creating value. Victoria Ticha examines how
There will be "many flavours" of defined benefit (DB) consolidators but consolidation will only be the right answer for a minority of schemes, Alan Rubenstein says.
Work and Pensions Committee (WPC) chairman Frank Field has questioned the regulator on what lessons it can learn from the experience of the Kodak Pension Plan No.2 (KPP2).