● Fjärde AP-fonden’s (AP4) mission is to contribute to the financial security for current and future pensioners in Sweden by managing part of the national pension system’s buffer capital. Its assets under management are neither too large nor too small and allow for economies of scale and in-house management. This enables cost efficiency without restricting investment opportunities. Management cost is currently at 0.08% of net assets.

● AP4 has two targets for evaluating the portfolio’s return: a real return target of 3% per annum evaluated over 10 years and an active return target above a benchmark portfolio of 1% per annum measured over five years.

● AP4 integrates sustainability aspects in its investment processes according to two focus areas: climate and environment and corporate governance. It started to invest in low carbon strategies in the global equities portfolio as far back as 2012. The following year, it made its first green bond investments. The carbon footprint of the listed equities portfolio has been reduced by 61% since 2010, including 3% reported during 2022. The interim target is to half the emissions once more by 2030, measured relative to 2020, and to be net zero by 2040 at the latest.

● Since 2020, AP4 also make sustainability related thematic investments including in renewables, resource efficiency and energy transition. These are proactive investments that not only contribute to the climate transition but also benefit from it. In 2022, the value of relevant investments that AP4 made amounted to €0.7m. Overall, since 2020, AP4 has invested in total €2.5bn to these themes, thereby contributing significantly to the climate transition.

● In 2022, AP4 introduced a new asset class: defensive equities. The weighting for the new exposure is 5% and it is funded from fixed income assets and global equities. These stocks are designed to generate returns while offering stabilising characteristics in market environments in downturn.