SWEDEN - The e25bn AMF Pension is likely to build on its mutual fund offering in 2005 with the addition of further funds.
Chief investment officer Mats Guldbrand said the Stockholm-based fund currently offers eight mutual funds.
“We will probably add some more mutual funds to our product offering… to broaden our offering in the unit-linked business,” he said.
While refusing to comment on the fund’s investment plans going forward, he said: “We are not completely locked into a benchmark so that could vary over time. Generally, we have a tilt towards equities and believe that equity will give us a better return than bonds this year.”
AMF posted an overall return of 9.8% for 2004, with Swedish equities the best performing asset class, posting a gain of 20%.
Guldbrand said he expected lower returns in 2005: “We believe that return will be lower this year because inflation is lower and return on fixed income is lower this year than last year.
“Last year the return on fixed income was boosted by falling interest rates and we are not expecting that this year. We have mainly the same view as most of the capital market that we are fairly close to the bottom of the interest rate cycle.”
Current asset allocation stands at 45% equities, 49% fixed income and 11% real estate.
AMF is largely a big cap investor, with the exception of small cap investment in the US.
“We invest in some of the big countries in Europe, the UK, Germany, France, the Dutch market, Italy, Switzerland and the US and regarding emerging markets it’s just the Pacific Rim,” Guldbrand said.
The major challenge for Swedish pension funds this year was to achieve exposure to bonds, in comparison to equity, in a period with very low interest rates, he added.
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