SWEDEN - AP3 saw its capital rise SEK20.2bn to SEK212.2bn over 2006, with net profit totaling 9.5%, or SEK18.6bn.
While the listed portfolio underperformed the benchmark, the fund’s active medium-term allocation strategy made a positive contribution to net profit, primarily by reducing exposure to foreign currency risk.
At year end, 8% of the portfolio was exposed to currency risk.
The listed portfolio underperformed the benchmark index in 2006, with active return totalling -0.2%.
Since inception in 2001, the SEK212.2bn AP3 has generated returns of SEK59.9bn.
AP3 CEO Kerstin Hessius said: “Thanks to four years of strong performance we have exceeded our target of a long-term real return of 4% per year. Together with the other buffer funds we have made a substantial contribution to the Swedish pension system.”
Meanwhile, AP4 failed to beat its 11.1% benchmark by 0.6% over 2006 when it posted a total return on investments of 10.5%.
By the end of last year, the assets of the fund had a market value of SEK200.6bn, compared to SEK180.2bn at the beginning of the year.
Although the fund said its investment assets performed strongly over the year, it failed to beat its benchmark of 11.1%.
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