AP1, Stockholm, reported a net return of 9.7% in 12 months ended Dec. 31, with assets increasing 7.3% to 392.6 billion Swedish kronor ($47.9 billion).
The pension fund said in an update Thursday that the return equated to a gain of 34.8 billion kronor. For the 12 months ended Dec. 31, 2019, the fund returned 15.1%, which equated to a gain of 48.6 billion kronor.
Assets increased 10.6% since June 30, 2020.
AP1 achieved an annualized total net return of 8.4% for the five years ended Dec. 31, and 8% for the 10-year period.
"I am incredibly proud of the fund's employees, who with great commitment have delivered on all aspects of our mandate — high returns, ambitious cost efficiency and sustainable value creation. During a challenging year, we have successfully steered the portfolio as well as nimbly adjusted both our exposures and our work practices. The fund's delivered return of 9.7% comfortably exceeds the long-term goals set by our board of directors," Kristin Magnusson Bernard, CEO of AP1, said in a release accompanying the update.
In 2020, AP1 reduced the carbon footprint of its listed equity portfolio by 46%. Equities accounted for 41.7% of the fund's total assets as of June 30. Fixed-income investments equated to 29.3%, real estate equated to 14.9%, private equity equated to 5.8%, hedge funds equated of 4.5%, and high-yield and infrastructure were 2.2% each.
Despite high returns in 2020, Ms. Magnusson Bernard added that the fund's executives foresee uncertainty for global financial markets.
"The strong equity market performance during last year stands in sharp contrast to the situation in the service sector and parts of the labor market. These dispersed effects of the pandemic will probably linger, and affect us for a long time to come," Ms. Magnusson Bernard said.