SWEDEN - Andra AP-Fonden (AP2) outperformed its benchmark by 70 basis points in the first half of this year.

The SEK232.8bn (€24.9bn) portfolio of the second Swedish national buffer fund returned 7% compared to 1.9% in the turbulent first six months of 2006.

Inflows and market appreciation contributed SEK16bn since December.

Best returns were produced by the fund's SEK46.1bn Swedish equity portfolio which outperformed its benchmark by 190 basis points to deliver a 14.7% return.

The fund's alternatives portfolio consisting of private equity investments and shares in two Nordic real estate companies, AP Fastigheter and Norrporten, returned 8.5%.

Eva Havarsson, chief executive of AP2, explained the good results were also down to "enhanced efficiency" in the fund's internally-managed portfolio. Approximately 78% of the fund's assets are currently managed in-house.

She added the internal management overhaul resulted "in a solid relative return and comparatively low costs compared to similar fund managers".

The Swedish version of the half-year report can be found on the fund's webpage while the English version will be available in early September.