AP4, Stockholm, recorded a 9.9% net return for the first half of 2021, delivering "historically favorable returns ... against the backdrop of massive financial stimulus measures" in 2020 and early 2021, the pension fund said Tuesday.
Assets increased 9% over the six-month period, to 489.9 billion Swedish kroner ($57.5 billion) as of June 30, the fund's interim report said. Assets were also up 21.5% year on year.
The fund's investment performance equated to a 44.5 billion kroner gain.
For the first six months of 2020, AP4 lost 2.5% or 10.6 billion kroner. Figures for the second half of 2020 were not available, but the fund achieved a 9.6% return for the 2020 calendar year, equating to a 39.3 billion kroner gain.
AP4's five-year annualized return was 11.5% as of June 30, compared with 9.8% as of Dec. 31, and 7.4% as of June 30, 2020. The 10-year annualized return was 10.6% as of June 30, up from 9.7% as of Dec. 31, and 9.5% as of June 30, 2020.
"In the uncertain environment that is still prevailing, it is natural that actors in the financial market are having a hard time determining what type of cycle the world economy is heading into. A tug of war is currently in progress where the hope for a prolonged period of strong economic growth is on the one side and concerns about bottlenecks and rising inflation are on the other," Niklas Ekvall, CEO of the fund, said in a news release Tuesday.
"This tug of war will likely result in an uncertain market environment going forward. We should also expect to see lower returns on financial assets in the coming years compared to what we have seen in the last 10 years," Mr. Ekvall added in the release.
The fund's asset allocation as of June 30 was 40% global equities; 18% global bonds; 17% Swedish equities; 14% real assets; and 11% Swedish bonds.
During 2020 and the first half of 2021, AP4 invested 10 billion kroner in sustainable infrastructure and renewable energy, Mr. Ekvall said.