"Sofa fund" is so called because it is the alternative for pension savers who have not made an active premium pension choice. The management of the Seventh AP Fund consists partly of a large equity fund and partly of a smaller interest fund.
The equity fund is a global index fund with high risk. It includes, among other things, shares from large American tech companies such as Apple, Tesla, and Nvidia, which have fallen sharply in the ongoing stock market downturn following the US trade turmoil.
Those under 56 years of age have 100 percent of their premium pension money in the equity fund.
So if you're only in the equity fund, that is, you belong to the younger part of our collective, then the fund is down 20 percent, says Lena Fahlén, who is the chief investment officer of the Seventh AP Fund.
Lower risk
She points out, however, that for those who are 56 years or older, more and more of the assets are gradually transferred to the much safer interest fund.
The older savers have two-thirds of their capital in the interest fund, and it has developed well in this turmoil, for them the decline has only been 6 percent.
The chief investment officer also reminds us that the sofa fund's product portfolio has so far, despite for example the 25 percent stock market crash at the beginning of the covid pandemic and financial crisis, been very successful.
On average, it has increased by 11 percent per year over the past 25 years and has had a growth of 600 percent up to the turn of the year 2024/2025.
Fairly uninterested
The Seventh AP Fund has neither had many contacts with worried pension savers nor seen people moving their money during the ongoing stock market downturn.
We don't see that people are extremely scared and taking out their money or anything like that. Many of our savers are perhaps not so knowledgeable, which is why it's so important that we do a good job with their money, says Lena Fahlén.
And right now, doing a "good job" means not acting, but rather spending a lot of time monitoring and analyzing the global and market situation.
When there is great drama, it's not like we're switching over to more interest funds or trying to time the market and go out or in. It's very difficult to do, and over time, it has shown itself to be a very good strategy to have long-term savings.
AP7 Equity Fund has fallen by 21.1 percent as of April 9 this year, while the Interest Fund has risen by 1.1 percent.
The Equity Fund has fallen by SEK 271 billion as of April 8 compared to the increase of SEK 297 billion last year.
Source: Seventh AP Fund.
