The AP Funds’ management mission means that the effects on pensions of automatic balancing should be limited, as it is only through this that the AP Funds’ returns are linked to outgoing pensions. The Funds should generate a high return while at the same time the risk should be low, based on the development of outgoing pensions. According to the law, the AP Funds must manage their funds in an exemplary way.
By law, the AP-funds follow investment rules which briefly are:
- Primarily acquire or hold such assets as are liquid. Liquid assets refers to money market instruments or transferable securities that are, or will be within one year from the issue, intended to be traded on a trading venue or a corresponding marketplace outside the European Economic Area (EEA), etc.
- At least 20 per cent of the Fund’s assets must be invested in receivables with low credit and liquidity risk.
- A maximum of 40 per cent of the assets may be exposed to currency risk.
- A maximum of 10 per cent of the Fund’s assets may be exposed to an issuer or group of issuers of interrelated parties.
- Equities in listed Swedish companies may not exceed 2 per cent of the total market stock exchange value.
- The Fund may own at most 10 per cent of the votes in a single listed company.
- At the time of the investment, a maximum of 40 per cent of the real value of the assets each of the First to Fourth AP Fund holds is placed in illiquid assets.
- The AP Funds must not have objectives related to trade policy or economic policy.
- The AP Funds must manage their funds in an exemplary way through responsible investments and responsible ownership. When managing funds, special emphasis must be given to how sustainable development can be promoted without compromising on the overall objective regarding return and risk.