Sweden’s giant national pension funds are cutting their allocation to low-risk bonds in favour of increased exposure to alternative investments such as private equity in a bid to boost returns, according to plans backed by the country's finance ministry.

The pension pots known as AP1, AP2, AP3 and AP4 — which have around $150bn under management between them, according to their website s— would need to hold just 20% of their portfolio in the safest bonds, down from the current 30%, the ministry said in a statement.