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2012 - a strong year in an uncertain world

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Year-end report 1 January - 31 December 2012

  • AP3 recorded a profit of SEK 22,638 million (loss: 5,483) in 2012.
  • Fund capital stood at SEK 232,956 million at year-end, up SEK 18,850 million from the prior year. The figure includes payments of SEK 3,788 million to the pension system.
  • The total return was 10.7% before expenses and 10.7% after expenses. Equities were the largest single contributor, accounting for 8.8 percentage points of total return.
  • Continued market concern over the debt crisis in southern Europe, rising fears over a budgetary crash in America and weakness in world economic trends provided the backdrop to 2012. Yet despite the weaker economic climate, most financial assets rose in value during the year.
  • In the 10 years from 2003 to 2012 AP3 generated a nominal annual return of 6.7%, outpacing the benchmark income index that is used to keep pension credits in line with inflation. The income index rose by 3.5% during the period.
  • The annual real return (adjusted for inflation) was 5.3% during the last 10 year-period, exceeding the Fund’s target of an annual 4% real return over time.

“The portfolio showed strong growth and produced a return of 10.7%. An annual average return of 6.7% over the course of the last decade means we have made a strong contribution to the pension system”, says Kerstin Hessius, CEO AP3.

”Many of the strategic decisions taken in prior years bore fruit in 2012. This was despite bond yields dropping to record lows, which meant that a major part of the portfolio – AP3 is required by statute to hold 30% of its assets in low-risk fixed income securities – posted a relatively low return.”

“We completed or exchanged contracts on real estate investments totalling SEK 7.5 billion during 2012, making AP3 the largest net investor in Swedish real estate in 2012.“

AP3’s annual report 2012 and a short version of the report in English can be down loaded from www.ap3.se. The complete English report will be published Mid March 2013.

For more information please contact:
Kerstin Hessius, CEO, telephone: 46 8 555 17 100, kerstin.hessius@ap3.se
Christina Kusoffsky Hillesöy, Head of Communications & Sustainable Investments,
telephone: 46 709 517 223, christina.hillesoy@ap3.se

AP3 is one of five so-called buffer funds within the Swedish national pension system. Together, the buffer funds hold around 10% of total pension system assets. AP3 is tasked by the Swedish Parliament with generating maximum possible benefit for the income pension system by managing our fund capital so as to deliver strong investment returns at a low level of risk. AP3 has twin roles in the pension system system: serving as a buffer when inflows and outflows cause imbalance in the system, and promoting the overall financial stability ofthe system. AP3's fund capital per 31 December 2012 amounted to SEK 232 956 million. Read more about us on www.ap3.se.

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