Global and European index funds next in line
The Swedish Fund Selection Agency, FTN, is announcing the next two procurements of funds to be procured to the premium pension fund platform – European equities index and Global equities index. Notice will be made for the procurements at the end of 2023 or in the beginning of 2024. FTN also announces two additional procurements to the plan for 2024; actively managed Swedish equities and Swedish equities index, in addition to previously communicated categories.
Notice will be made simultaneously for the procurements of European equities index, AUM SEK 14 bn*, and Global equities index, AUM SEK 40 bn*. Fund managers that wish to participate in both procurements will have to submit separate tenders for each category.
In addition to the index procurements, notice is planned during 2024 for the following procurements, without consecutive order:
- Nordic Equities, actively managed: AUM of ~ SEK 19 bn*
- Global bonds: AUM of ~ SEK 0.7 bn*
- Swedish Equities, Actively managed: AUM of ~ SEK 74 bn*
- Swedish Equities, Index: AUM of ~ SEK 46 bn*
To inform fund managers about the upcoming index procurements, FTN shares a Fund specification draft for the procurement of Global equities index (see slide 13 in attached pdf). Since the next two procurements are the first index categories to be procured to the premium pension fund platform, FTN also shares examples of the preliminary requirements on index funds and selected benchmarks, which are currently under evaluation and can be subject to change.
Examples of preliminary requirements for index funds:
- Fund must be constructed to replicate or follow an index.
- Tracking Error < 0,5% against the selected benchmark index.
- Selected benchmark should be a standardized index or a customized index e.g. sustainability screened indices.
- Preferred strategies for index funds are full replication or stratified replication.
Examples of preliminary requirements for selected benchmarks:
- Must be provided by an independent index provider.
- Index must be provided by an established provider such as Bloomberg/MSCI/FTSE/Russell/S&P/Solactive or provider approved under the EU regulation on benchmarks (BMR).
- Must use transparent index methodology.
- Must follow regular rebalancing schedule.
- Index must fulfil the minimum sustainability requirements e.g. exclusion of controversial weapons and companies that repeatedly violate international conventions.
The above information regarding coming procurements and the preliminary requirements on index funds and selected benchmarks were communicated at a Status update event held by Executive Director Erik Fransson and Head of Communication Viktor Ström, on Tuesday November 21st, 15:00 CET. During the event, FTN also shared that the tender fee, annual fee for procured funds and the fee for application-based funds on the fund platform, will remain unchanged during 2024.
FTN welcomes comments and questions on the procurement plan, which can be sent to procurement@ftn.se. FTN will not be able to answer all questions, but will review and consider all submitted comments. Please note that documents received by an authority are official documents. Official documents are public insofar as they do not contain information that must be kept secret under the Swedish Public Access to Information and Secrecy Act (2007:400). Public documents may therefore be disclosed in full or in part if someone requests access to them. Information protected by confidentiality is not disclosed. However, FTN will make an independent confidentiality assessment which in turn may ultimately be reviewed by a court.
*AUM is the amount allocated to the category today. It is not guaranteed that the procured volume will be equally large.
Find the presentation from the Status update event here
Pdf, 2.9 MB..