The fund is often referred to as the "sofa fund" and is an alternative for pension savers who have not made an active premium pension choice.
And it has been an extraordinary non-decision for many years. In 2024, the fund has had a return of almost 30 percent, several times better than the Stockholm Stock Exchange.
It's clear that you're extremely pleased. It's a fantastic development, says Lena Fahlén.
Manages 1,500 billion
She is the chief investment officer and deputy CEO of the state-owned AP7, with a value of approximately 1,500 billion kronor. The explanation for the boost is threefold: the weak Swedish krona, the fund's leverage effect, and above all, the exposure to American tech giants. Thanks to their stock price surge, the "Magnificent seven" companies account for over 20 percent of the fund's total capital, which raises two questions:
Is Lena Fahlén afraid of a tech bubble similar to the one in the 1990s?
I think the difference is enormous, she says.
Back then, companies like Framfab never made profits but were traded on future profits. Here, huge profits are being made. It's not the same inflated valuations, although it's starting to get strained.
When does it become a problem that a few companies get such a large weight in a portfolio?
We're keeping an eye on it. The analysis we do is that there is no bubble valuation, but if we saw even more strained valuations, I'd say we'd have to act.
Lena Fahlén takes China as an example, where they chose to reduce exposure during the year.
We haven't removed China because we want to "trade" on it, but to reduce the risk, linked to the geopolitical and economic development. You might miss the last upswing, but we're managing our pensioners' assets.
Good conditions
What can AP7's 5.8 million pension savers expect from the stock market in 2025? The conditions for the stock market look good, with lower interest rates and inflation, but the cloud of uncertainty remains regarding how Donald Trump will act on trade tariffs, warns Lena Fahlén.
I think he's frustrated that he didn't get as much through as he wanted last time. Now he's better prepared and knows what it means to sit in the White House.
Better prepared, is that positive or negative?
I see it with greater concerns. Previously, he had a very established administration that could smooth out the edges of the most radical proposals. The appointments he's made so far show a pretty tough agenda.
AP7 Såfa is a ready-made fund portfolio that consists of a mix of two funds: AP7 equity fund and AP7 bond fund. The distribution between these is adjusted according to the saver's age.
The equity portfolio, which consists of over 3,000 companies, can be described as a global index portfolio.
This means that among the largest holdings are:
1. Apple
2. Nvidia
3. Microsoft
4. Amazon
5. Facebook (Meta)
6. Tesla
AP7 can simultaneously blacklist companies that do not meet the requirements. At the end of the year, a total of 110 companies were excluded, approximately half of which are fossil fuel companies based on the Paris Agreement.
Among other companies are those involved in cannabis activities or nuclear weapons.
