State pensions generally have two components: an income pension and a premium pension.
Income pensions account for 86 percent of the state pension and are a secure and stable investment linked to Swedish economic growth. They can be compared to a Swedish index-linked bond and thus offer low returns.
The premium pension represents 14 percent of the state pension. After the age of 55, AP7 Såfa invests the investor’s premium pension assets in a global equity portfolio across multiple sectors to spread risk and provide a pension that is not over-reliant on any single investment.
We supplement the equity portfolio with higher-risk financial instruments, creating scope to generate returns that are 1.5 times higher than for a global fund. This level of risk is roughly that of a standard Sweden-based fund.
