The COVID-19 pandemic has changed the playing field for the global economy and affects us all, directly or indirectly. For Första AP-fonden (AP1) the pandemic entailed some intensive activities during the spring, with constant evaluation of the allocation strategy based on a rapidly evolving situation, while at the same time measures were taken to safeguard the health and safety of the Fund’s employees.
At the beginning of the year, AP1 was of the opinion that the prospect of continued growth was unlikely, and the fund was positioned for a downturn in the market. Consequently, the Fund went into the crisis with relatively low risk, and was therefore able to increase its exposure to equity markets, before the markets gradually recovered. During the first half-year parts of the portfolio delivered excellent returns, such as the Swedish small cap portfolio, and the fund also had a favourable position in our fixed-income investments, while recovery in the broader portfolio was slower. The return after expenses was -1.8 % for the first half-year. During the first half of 2020 SEK 4,2 billion could be paid into the Swedish income pension system and the Fund’s managed capital amounts to SEK 355 billion on 30 June 2020.
Acting CEO Teresa Isele comments on the first half-year:
“The effects of the COVID-19 pandemic are very hard to assess. Measures to halt the spread of infection have had significant effects on companies’ value chains, followed by record increases in bankruptcies and unemployment in many countries around the world. Meanwhile, the record stimulus packages from central banks and governments have led markets to become increasingly optimistic about a speedy recovery of the global economy. AP1 was well positioned at the onset of the crisis, which enabled us to increase our exposure to equity markets before the markets gradually recovered. Overall, our real return after expenses in the latest ten-year period has been 6.7 per cent.”
“Our current assessment going forward is that the market outlook does give some cause for concern in the shape of increased global tensions and potential trade dispute, impact of the COVID-19 pandemic in general and on politics, combined with higher indebtedness as a result of the stimulus packages. Our important mission, managing the Swedish people’s income pensions, requires a long-term approach to our asset management. This in turn creates good opportunities for handling a volatile market.”
Download AP1’s 2020 Interim Report here.
For further information, please contact:
Teresa Isele, Acting CEO, AP1. Phone +46 (0)8-566 202 00
Sara Christensen, Head of Communication, AP1. Phone +46 (0)70-968 12 50