Outcome for procured European index funds

On 31 January 2025, all procured European index funds became available on the premium pension fund platform. Now, one year later, the Swedish Fund Selection Agency has compiled the outcome for this category.

The procured funds have had an average return of 4.85% during the period. This can be compared with the previous offering, which over the same period had a return of 4.56%. The procured funds have thus on average delivered 0.29 percentage points higher returns than the previous offering.
“The result is interesting because no new funds were procured, the entire positive effect comes from three funds being removed and fees being reduced for the remaining funds,” says Viktor Ström, Head of Communications at the Swedish Fund Selection Agency.

It is worth noting that differences in returns between index funds are often due to the funds tracking different indices. That one fund performs better than another does not necessarily mean that the quality of the management is higher, but may instead be explained by the choice to replicate a different index.

This is the second procured fund category with twelve months of history. In the first category, actively managed European equity funds, the average return increased by nearly 1.5 percentage points during the first year.
“This is the pattern we expected to see. The selection process has the greatest positive effect in actively managed equity funds, and a positive but smaller effect for index funds. At the same time,” says Viktor Ström.

Erik Fransson, executive director of FTN highlights the long-term effects of higher quality funds.
“One year is too short a period to draw any firm conclusions. But we view the results as an indication that reinforces our assessment that the average return will increase by around 0.5 percentage points per year once all funds within the premium pension system have been procured. That may sound small, but over time it means 1,000 kronor more per month in pension for life for millions of Swedes.”

Among the procured funds, Storebrand Europa and Handelsbanken Europa Index Criteria have performed the strongest, both with a return of 5.4% in the first year.

The funds that were excluded by the Swedish Fund Selection Agency in this category were Länsförsäkringar Europa Index, DNB Europa Indeks and Öhman Marknad Europa. Of these, Länsförsäkringar Europa Index has performed the weakest, with a return of 2.7% over the period.