Equity management
Internal equity managemnet is divided between twop ortfolios, one Swedish and one European, and an absolute return portfolio in both Sweden and Europe.
The investment process is based on a long-term horizon with fundamental analysis of expected earnings growth, stock valuation and risk. In 2010 the portfolios were further concentrated in fewer holdings and, for reasons in liquidity, are weighted mainly in large and mid cap stocks.
The portfolio focused on absolute return consists of some 15 stocks in Sweden and Europe with expected long-term fundamental values significantly exceeding their current market prices and relatively stable earnings. The mandate also provides an opportunity to reduce equity exposure, which gives the Fund certain scope to hedge for stock market downturns. Performance is evalueated on a long-term basis against an absolute return requirement that is not index-related.