AP3, Stockholm, achieved a 3.3% return in the first half of the year, helping to bolster assets by 2.3% to 353.1 billion Swedish kronor ($39.4 billion).
The fund said in an update Wednesday that the return equated to a gain of 11.2 billion kronor. That compared with a 5.4%, or 17.5 billion kronor, gain for the six months ended June 30, 2017. Figures for the half-year ended Dec. 31 were not available.
The five-year annualized return to June 30 was 10.1%; and the 10-year annualized return was 7.3%.
The fund has steadily increased its allocation to unlisted equities, real estate, infrastructure and other unlisted assets over the years. As of June 30, it had a 22.1% allocation to unlisted assets, compared with 20.7% as of Dec. 31. A report accompanying the update said 25% of all fund assets are run externally.
Calculations show the fund's approximate asset allocation as of June 30 was 29.9% foreign equities, 21.7% foreign fixed income, 17.3% real estate and infrastructure, 12.5% Swedish fixed income, 11.5% Swedish equities, 3.4% unlisted equities, 1.4% Swedish index-linked bonds, 1.4% other assets and 0.9% foreign index-linked bonds.
"AP3's total return in the first six months of 2018 was buoyed by a continued upswing in our real estate investments and a strong dollar," CEO Kerstin Hessius said in the report. "At global level, monetary policy continues to be loose. Although the U.S. Federal Reserve has the highest interest rates in the west, having raised them six times since the start of 2017, the Fed funds rate is only 2%. AP3 scaled back portfolio risk during the period, reflecting a measure of caution regarding the market outlook," she said.
Further details were not immediately available.