SWEDEN - The Skr140bn (e15bn) AP2 has posted a total return of 17.7% for 2003, as compared to returns of -15.3% in the previous year.
However, relative to the benchmark the fund has underperformed by 0.8%.
The fund said this was partly attributable to the inclusion of the fund’s hedge fund holdings in Swedish equities and partly due to the type of securities selected.
Lars Idermark, the fund’s CEO said: “The good result is primarily attributable to retention of a high ratio of equities in the portfolio throughout 2003, at a time when the world’s leading stock markets were posting sharp increases in market rates.
“After three years of declining stock markets, 2003 marked something of a turnaround in the world of long-term asset management. Maintenance of our consistent commitment to a policy of long-term investment has enabled us to report a highly satisfactory result.”
The fund said the award of mandates for the external management of fixed income instruments which had been postponed would be implemented in 2004.
AP2 also approved a change in strategic portfolio for 2004 focussing on an increase in the active management of the fund’s assets in conjunction with the decision to delegate management of a significant proportion of the fund’s assets to external managers.
The asset allocation stands unchanged at 60% equities and 40% fixed-income instruments.
Alternative investments have also now been redefined as a new asset class, comprising asset-groups real estate, risk capital funds and hedge funds.
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