SWEDEN - AP1's fixed income and alternative investments generated positive returns in the first half of 2008, despite a total negative return of -8%.
AP1 said the fund's fixed income portfolio did not incur any credit loss as a result of the mortgage crisis.
At mid-year 2008, the fund's total exposure to equities was 61%, compared to a fixed income exposure of 37% and a foreign exchange exposure of 20%.
Johan Magnusson, managing director of AP1, said: "While it is obviously negative for the fund's asset value to fall in periods with bearish stock markets, this is a logical consequence of our chosen equity exposure.
"In fact, we need to maintain a large share of equities in our portfolio to create the high return over time that our mission requires. The analysis of the fund's long term asset mix that we completed this spring has further strengthened this conviction."
At 30 June 2008, AP1 had net assets under management of SEK201.8bn (US$31.6bn), a decrease of SEK17bn (US$2.66bn) since year-end 2007, including net inflows.
The period's investment earnings of SEK-17.6bn corresponds to a total return of -8.0% before, and -8.1% after, operating expenses.
In terms of corporate governance, the fund said during H1 it participated in all shareholders meetings in Swedish companies in which it had significant holdings.
The Pensions and Lifetime Savings Association (PLSA) is in the process of convening an industry-wide group to take forward the work of the Institutional Disclosure Working Group (IDWG).
The Transfers and Re-registration Industry Group (TRIG) has given its support to an initiative which aims to complete occupational pension transfers within three weeks.
Scottish Widows has completed a bulk annuity deal for the Hitachi UK Limited Pension Scheme.