AP2, Gothenburg, Sweden, recorded a 10.2% net return in the six months ended June 30, boosted by the fund's exposure to public and private equity.
The fund's return equated to a net gain of 39.2 billion Swedish kronor ($4.6 billion), according to its interim report. In the first half of 2020, the fund's net return was -5.1%, equating to a loss of 19.3 billion kronor.
AP2's five-year annualized return was 8.7% as of June 30, compared with 5.3% as of June 30, 2020. The 10-year annualized return was 8.5%, vs. 7.7% a year earlier.
Assets grew 9% over the six-month period and 17.7% for the year to 421.2 billion kronor.
"Our profit of SEK 39.2 billion is the best half-year result ever achieved by the fund. It is also pleasing to note that our efforts to reduce costs have had an effect and that we have the lowest-ever total management cost ratio," CEO Eva Halvarsson said Wednesday in a news release accompanying the report.
"Macroeconomic growth in the half-year was characterized by a gradual economic recovery after the sharp cyclical decline in 2020 as a consequence of the pandemic," she added.
"Primarily, the fund's equity portfolios and the portfolio of private equity funds gave the strongest returns during the first half-year," she said, adding that the fund's Swedish and global equity portfolios returned 22.3% and 17.2%, respectively.
"Emerging market equities appreciated by 14.8% and private equity funds gave a return of no less than 39.7%," she added.
The fund's portfolio was invested in alternatives at 27.8%, which returned 14.5%; developed market equities at 22.2%; emerging market equities at 10.7%; Swedish equity at 9% and emerging market debt at 7.5%, which returned 1.6%.
The fund's 9.5% allocation to global credit delivered a 2% return over the first six months. Swedish fixed income, with a 6.1% allocation, returned -0.8%, while global fixed income at 4.3% lost 0.6%. Green bonds at 2.9% returned -1.1%.
