2024 Performance Overview
On February 20, 2025, the Fjärde AP-fonden (AP4) published its annual report for 2024, detailing a 10.1% return after costs, bringing total fund capital to SEK 548.2 billion by year-end. Over the past year, AP4 navigated a volatile global market, leveraging its diversified investment strategy to maintain strong performance while adapting to shifting economic conditions.
Throughout 2024, AP4 focused on strengthening its Defensive Equities allocation to mitigate risk in uncertain market conditions. The fund also increased investments in real assets, including infrastructure and real estate, to provide long-term stability and inflation protection. Sustainability remained a central theme, with SEK 4.6 billion allocated to thematic sustainability investments, contributing to a 15% reduction in carbon footprint, totaling a 70% decrease since 2010. Additionally, AP4 maintained a cost-efficient structure, with total costs at 0.07% of managed assets.
Strategic Focus for 2025 and Beyond
AP4 anticipates continued market volatility in 2025 due to global macroeconomic uncertainties, geopolitical tensions, and evolving monetary policies. In response, the fund will refine its long-term asset diversification strategy, with an emphasis on risk-adjusted returns. AP4 plans to expand its Defensive Equities portfolio, particularly in stable sectors like healthcare and consumer staples. Additionally, the fund will increase its exposure to alternative investments, such as private equity and sustainable energy projects, to capitalize on long-term growth opportunities.
Fixed Income and Infrastructure Investments
Fixed-income investments will remain a key area of focus, with a strategy centered on high-quality corporate bonds and sovereign debt in regions with favorable macroeconomic conditions. AP4 will also continue optimizing its infrastructure and real estate investments to enhance portfolio resilience against inflation and economic downturns.
Upcoming Structural Changes
As the planned consolidation of buffer funds approaches in January 2026, AP4 will engage in the transition process to ensure seamless integration and sustained performance. The Swedish government will consolidate AP1 into AP3 and AP4, reducing the number of buffer funds from five to three. By balancing defensive strategies with sustainable investments, the fund remains committed to delivering stable returns for Sweden’s pension system while adapting to an evolving financial landscape.
Key Highlights
- December 31, 2024: SEK 548.2 billion in total fund capital.
- 2024: 10.1% return after costs, exceeding the long-term target.
- 2024: SEK 4.6 billion invested in sustainability-focused assets.
- 2024: 15% reduction in carbon footprint, totaling a 70% decrease since 2010.
- 2024: Increased allocation to Defensive Equities for greater portfolio resilience.
- 2024: Maintained low costs at 0.07% of managed assets.
- 2025: Increased investments in Defensive Equities, real assets, and alternative investments.
- 2025: Expanded focus on fixed-income investments in corporate bonds and sovereign debt.
- 2025: Outlook: Market volatility expected, with continued focus on risk-adjusted returns and sustainability.
- January 2026: Government to consolidate buffer funds, merging AP1 into AP3 and AP4.
