SWEDEN - AP2, Sweden's second national pension fund is currently process of making changes to its fixed income strategy.
Fixed income currently accounts for around 40% of the fund’s E14.4bn assets.
Initially AP’s fixed income allocation targeted domestic issues, which were managed on a passive basis. But earlier this year a decision was taken to change the investment stance. The reference benchmark will now be the Lehman Brothers Global Aggregate Bond Index.
The Swedish domestic market is relatively small and lacks both the range of instruments and liquidity found in other markets, said Ole-Petter Langeland, head of fixed income.
Henceforth, the fund will focus primarily on global credits and government debt. This will provide a much wider source of returns as well as greater diversification. We do not envisage investing in emerging market debt, however.
AP2 is currently handling the transition to its new global strategy. But ultimately it will outsource specific investment mandates to external managers.
Initially, we shall handle the manager selection process ourselves, continued Langeland.
But we may involve consultants at a later stage.”
A final decision on mandate specification, together with manager selection, should be made sometime during 2003.
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