Highlights of 2010

• 2010 was a year of contrasts. In the developed countries, massive debt and weak banks stood out as the foremost concerns. However, high growth in the emerging markets created good sales opportunities for many companies and had a positive impact on many Swedish businesses.
• The Fund posted net investment income of SEK 20.5 billion, equal to a total return of 10.2 percent after expenses. This return is primarily attributable to stock market development in Sweden and other developed countries, although fixed income assets also performed well.
• In the past year the Fund raised the proportion of equities, mainly in Sweden and Emerging markets, which has contributed to the favourable results.
• At year-end 2010 the Fund had net assets under management of SEK 218.8 billion, an increase of SEK 16.5 billion.
• The year’s pension disbursements exceeded pension contributions by SEK 4.0 billion.
• Administrative expenses have decreased by far to 0.13 percent of average assets under management.

Fund asset exposure to different regions at December 31, 2010

Return by asset class 2010, percent¹

¹ Return on net assets is also impacted by the Fund’s open currency exposure.
² According to the definition used by the Fund, the Pacific region consists of Australia, New Zealand, Singapore, Hong Kong and Japan. In certain mandates, Japan is reported separately.

Five-year overview

	2010	2009	2008	2007	2006
Closing net assets, SEK bn	218.8	202.3	171.6	218.8	207.1
Net flow to/from the pension system, SEK bn	-4.0	-3.9	0.9	2.0	1.7
Net investment income, SEK bn	20.5	34.6	-48.0	9.7	18.2
Total return before expenses, %	10.3	20.4	-21.7	4.8	9.8
Expense ratio, total, %	0.13	0.16	0.16	0.15	0.15
Expense ratio excl. commission costs, %	0.08	0.10	0.09	0.08	0.08
Currency exposure, %	24.0	21.6	22.2	19.2	16.2
Share of external management, %	43.7	42.4	39.7	36.0	34.2

Asset class

Equities	Description	% of portfolio, 31 Dec. 2010	Return, % 2006–2010
North America, Europe, Pacific	Europe: Internal management with a focus on large caps North America: External management, mandates with a focus on small caps and large caps Pacific: External management
Sweden	Internal management with a focus on large caps and mid caps
Emerging markets	External management

Fixed income
Nominal Swedish	Internal management
Nominal non-Swedish	Internal management aside from non-Swedish credit bonds
Index-linked fixed income	Internal management

Alternative investments
Alternative investments	Unlisted assets: real estate, private equity, hedge funds and opportunity investments

Cash, foreign exchange and asset allocation
Cash, foreign exchange and asset allocation

Currency exposure
Currency exposure	The Fund has an open currency exposure equal to approximately 24 percent of the market value of net assets. Internal management.

¹ According to the definition used by the Fund, the Pacific region consists of Australia, New Zealand, Singapore, Hong Kong and Japan. In certain mandates, Japan is reported separately.

• Introduction
  • Highlights of 2010
  • Message from the Managing Director – Another year with good return
  • Första AP-fonden is a long-term investor
  • Economic outlook – a world in imbalance
• Organization and employees
  • Competent employees
• Operations and results 2010
  • Directors’ report
  • Fund performance
  • Five-year overview
  • Total return
  • Internal management
  • External management
  • Portfolio composition
  • Valuation of financial instruments
  • Income statement
  • Balance sheet
  • Accounting and valuation policies
  • Notes
  • Board of Directors’ statement of assurance
  • Audit report
  • Fund management report
  • Report on internal control and risk management
  • Board of Directors
  • Executive Management Team