Sweden’s AMF has reported an 11.1% investment loss from January to September this year, with its chief executive officer saying its pensioners would all be affected to some degree if the weak market conditions continued.
Johan Sidenmark, CEO of the labour-market pension fund – the second-biggest in Sweden after Alecta – said in the interim report this morning: “The third quarter of the year was characterised by continued economic unrest and turbulence, with rising interest rates, high inflation and volatile stock markets.”
He said the pension fund was financially strong, despite the challenging global situation, and that it was carrying on investing in companies it believed would provide good returns in the long term, continuously reviewing its allocation and adapting its strategy.
“In the short term, we also have some opportunities to mitigate the effect of a sustained decline for significant parts of our customers in payment, although no one will be completely exempt from the impact if the trend continues in the current direction,” Sidenmark warned.
Meanwhile, chief investment officer Tomas Flodén maintained that continued large ownership stakes in key Swedish companies would be good for AMF’s savers in the long term, although he said the year-to-date return had also been dragged down by weak development in the domestic stock market.
“During the year, we have reduced the risk in our portfolio by reducing the proportion of foreign shares and have had a very low exposure to rising bond yields, which contributed positively to the return,” he said.
Flodén added that the blue-collar occupational pension fund had continued to increase investments in real assets and unlisted companies, with the intention of diversifying risk and generating a strong long-term return. He said this move had contributed positively to AMF’s third-quarter return.
Two weeks ago, Alecta also reported heavy losses for the period, with its defined contribution product – which had a 60% equities weighting – ending September with a 13.1% year-to-date loss.
AMF reported that its solvency ratio stood at 223% at the end of September which compares to 232% at the end of 2021.
The firm’s total assets dipped to SEK715bn (€65.7bn) by the end of September, from SEK850bn at the end of last year.
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