Diversification of risks creates options for generating returns

The Equities unit manages Swedish and, to an extent, Nordic equities in both large and small caps; other equities are managed by the Exposure unit. Management is fundamentally active and is conducted internally within the Fund.

Första AP-fonden’s fixed-income portfolio includes bonds with high credit quality that have been issued by governments and enterprises. By law, no less than 20 per cent of the Fund’s assets have to be invested in bonds with good credit quality: these are known as covered bonds. Management is based on thorough analysis of the global economy, fiscal policy, monetary policy and geopolitics. Bonds have an important role to play in the Fund’s liquidity, as they are readily convertible into cash and can be used as collateral. 

The Fund’s currency portfolio is managed with emphasis on macroeconomic factors and regulations, and trades in approved FX derivative instruments for a range of currencies.

Första AP-fonden’s unlisted investments consist mainly of investments in the real estate and infrastructure sectors, in the form of investments in both companies and funds, and in private equity funds.

Besides diversification and stabilisation, the Fund’s alternative investments contribute by enabling greater influence on sustainability issues in companies where the Fund is a major shareholder. The investments also provide a degree of protection against inflation over time.

The Exposure unit manages equities in developed regions, as well as currency and options strategies. This unit is responsible for the Fund’s liquidity management, securities trading and hedging, and its primary task is to manage all flows and planning for future inflows and outflows in the income pension system, with daily control over the Fund’s transactions.

GTAA is a dynamic investment strategy that actively adjusts the Fund’s asset allocation. The group’s decisions are based on systematic, evidence-based insights from rigorous research and oversees the Fund’s long-term risk allocation.

SysStrat focuses on equities in developed markets and endeavours to broaden its use to more areas over time. The strategy is data-driven and based on academic research, with emphasis on investing in companies with a strong ESG profile, good growth and stable stock market performance.

Our responsible investment efforts are intended to help maintain confidence in Första AP-fonden, improve our risk management and, where possible, lead to improved returns.

We support companies in making sustainability improvements, as well as analysing sustainability risks and identifying investment opportunities that would benefit from sustainable development.