SWEDEN - Despite only producing a 4% annual investment return after costs, the second AP fund (AP2) finished 2007 SEK10.7bn (US$1.6bn) up on 2006, with a value of SEK227.5bn.
Eva Halvarsson, CEO, AP2, said: "The past year is likely to go down in history as one of exceptional turbulence on financial markets.
"Even so, the second AP Fund is able to report a favourable return for the fifth year in succession."
Contributions accounted for SEK2bn of inflows with the fund making a further SEK8.7bn on its investment strategy.
The fund said during 2007 it had posted a negative, relative return of -0.4% on quoted assets, before commission and operating expenses.
AP2 said this was largely attributable to rebalancing effects resulting from high market volatility and stated a new rebalancing procedure had been initiated.
Alternatives investments produced a 13.4% return for the fund with emerging and Asian markets, excluding Japan, being quoted as the most profitable over 2007.
The fund's relatively low exposure to foreign currency at 11% was quoted to have avoided it feeling the weak US dollar's effect on absolute returns to a great extent.
In December, AP2's CIO, Poul Winslow, announced he would leave the role by April 2008 to join Nordea, where he would build a fund of hedge fund business.
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