Economic conditions made it tough for two Swedish funds in 2007, according to data from their annual reports. But AP Fonden 1, Stockholm, still beat its custom benchmark by about 90 basis points, reporting an investment return of 4.6% after expenses in 2007, according to its annual report. Total assets were 218.8 billion Swedish kroner ($34.4 billion) as of Dec. 31.
The fund has outperformed its strategic benchmark by at least 50 basis points for at least the past five years, said William af Sandeberg, managing director of AP1, in a press release about the report. Healthy returns from overseas equity, particularly emerging markets, and global fixed income contributed to positive performances, he added.
At year end, 59% of the funds portfolio was invested in equity, 39% in fixed income and the remainder in alternative investments.
AP Fonden 3, also based in Stockholm, returned 5% after expenses for 2007, or 30 basis points below its benchmark, according to a news release. As of Dec. 31, the fund had 224.9 billion kronor in total assets. It was a year of major revaluations on the financial markets, with risks rising sharply during the second half, said Kerstin Hessius, CEO of AP3, in the release.
The fund has a 52% exposure to equity, 41% to fixed income and the remainder in alternative investments as of year-end 2007.