AP4, Stockholm, recorded a -2.5% return for the first half of 2020 in what it labeled a "brutal" period for markets.
Assets fell 3.5% over the six-month period, to 403.2 billion Swedish kroner ($43.3 billion) as of June 30, the fund's interim report said. Assets were up 3% year on year.
The fund's investment performance equated to a 10.6 billion kroner loss. For the first six months of 2019, AP4 gained 13% or 45.2 billion kroner. Figures for the second half of 2019 were not available, but the fund achieved a 21.7% return for calendar year 2019, equating to a 75.2 billion kroner gain.
AP4's 5-year annualized return was 7.4% as of June 30, compared with 9.3% as of Dec. 31, and 9.3% as of June 30, 2019. The 10-year annualized return was 9.5% as of June 30, down from 9.9% as of Dec. 31, and 10.4% as of June 30, 2019.
"The scope of the impact on the real economy during the first half of 2020 has been brutal. The speed and depth of the economic slowdown far exceeds what we saw during the financial crisis," Niklas Ekvall, CEO of AP4, said in a news release Tuesday.
The fund increased its allocation to corporate bonds issued by companies that structurally benefit — "or at least are not put to a disadvantage — from the long-term impacts of the COVID-19 crisis," Mr. Ekvall added.
The fund's asset allocation as of June 30 was 40% global equities; 24% global bonds; 15% Swedish equities; 13% real assets; and 8% Swedish bonds.
AP4 is also working alongside other asset owners to establish an investment company that aims to support unlisted, midsize Swedish companies suffering in the COVID-19-induced market environment, Mr. Ekvall said. Further details were not available.