Key Takeaways
- • The Swedish Fund Selection Agency (FTN) awarded contracts to 14 funds from 12 managers in its largest-ever procurement of actively managed global equity funds, with nearly SEK 200bn (£16.3bn) to be distributed to winning funds.
- • Winners include sustainable offerings from Fidelity (Global Equity Income ESG Fund), JP Morgan (Global Sustainable Equity Fund), and Schroders (Global Sustainable Value Fund), alongside Robeco's Global Stars Equities Fund and Columbia Threadneedle's Global Focus Fund.
- • FTN reports that the average fee for its active global equity category fell by 50% after 22 managers reduced fees during the negotiation stage.
- • 99 tenders were received in response to FTN's November 2024 call, with on-site interviews conducted with 27 managers before the final decision.
- • FTN states the minimum sustainability level in the funds has been raised, though it described the prior fund range as outdated with weak historical returns.
Summary
The Swedish Fund Selection Agency (FTN), which procures funds for Sweden's public pension system, has announced the winners of its largest-ever procurement of actively managed global equity funds. According to a statement from FTN, nearly SEK 200bn (£16.3bn) will be distributed to the winning funds. In total, 14 funds from 12 fund managers were awarded contracts.
The winning list includes sustainable equity offerings from JP Morgan, Schroders and Fidelity, specifically Fidelity's Global Equity Income ESG Fund, JP Morgan's Global Sustainable Equity Fund and Schroders' Global Sustainable Value Fund. Robeco's Global Stars Equities Fund, which according to its disclosures sets a minimum sustainable investment threshold of 50%, also won a contract. Columbia Threadneedle's Global Focus Fund was selected despite 76% of its holdings being in companies with lower ESG materiality ratings, according to its disclosures. FTN declined to comment on the implications of Nuveen's takeover of Schroders, announced earlier in the month.
The process took more than two years, beginning with FTN's call for funds in November 2024, which drew 99 tenders. Unsuccessful bids included BlackRock's Systematic ESG World Equity Fund, BNY Mellon's Sustainable Global Equity Fund, T. Rowe Price's Growth Equity Net Zero Transition Fund, Northern Trust's High Dividend ESG World Equity Fund and Impax's Global Equity Opportunities Fund. FTN conducted on-site interviews with 27 managers, then invited managers to reduce costs; 22 did so before the final decision. Managers will now be offered the opportunity to enter into agreements for the chosen funds.
FTN chairman Mats Dillén said the interest in the procurement was exceptionally high, giving the agency good conditions to identify the funds best meeting mandatory requirements, and that all procured funds are of high quality and are being offered to savers at attractive fees. Executive director Erik Frannson said the prior fund range was outdated and had delivered weak historical returns, and that savers will now access a quality-controlled range aligned with current market demand. In its final procurement report, FTN confirmed that the average fee for its active global equity category was reduced by 50% and that the minimum level of sustainability in the funds has been raised.
The winning list includes sustainable equity offerings from JP Morgan, Schroders and Fidelity, specifically Fidelity's Global Equity Income ESG Fund, JP Morgan's Global Sustainable Equity Fund and Schroders' Global Sustainable Value Fund. Robeco's Global Stars Equities Fund, which according to its disclosures sets a minimum sustainable investment threshold of 50%, also won a contract. Columbia Threadneedle's Global Focus Fund was selected despite 76% of its holdings being in companies with lower ESG materiality ratings, according to its disclosures. FTN declined to comment on the implications of Nuveen's takeover of Schroders, announced earlier in the month.
The process took more than two years, beginning with FTN's call for funds in November 2024, which drew 99 tenders. Unsuccessful bids included BlackRock's Systematic ESG World Equity Fund, BNY Mellon's Sustainable Global Equity Fund, T. Rowe Price's Growth Equity Net Zero Transition Fund, Northern Trust's High Dividend ESG World Equity Fund and Impax's Global Equity Opportunities Fund. FTN conducted on-site interviews with 27 managers, then invited managers to reduce costs; 22 did so before the final decision. Managers will now be offered the opportunity to enter into agreements for the chosen funds.
FTN chairman Mats Dillén said the interest in the procurement was exceptionally high, giving the agency good conditions to identify the funds best meeting mandatory requirements, and that all procured funds are of high quality and are being offered to savers at attractive fees. Executive director Erik Frannson said the prior fund range was outdated and had delivered weak historical returns, and that savers will now access a quality-controlled range aligned with current market demand. In its final procurement report, FTN confirmed that the average fee for its active global equity category was reduced by 50% and that the minimum level of sustainability in the funds has been raised.
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