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Impact Investing

IPE special report May 2018

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All PPM's 455 funds attract cash

Funds available under Sweden’s premium pension system (PPM) have taken delivery of their first assets following the return of thousands of catalogues from the country’s northern regions. PPM Authority is staggering the distribution of catalogues which have a choice of over 455 funds in which to invest. Employees have four weeks to pick their funds.
Only Sek2.48bn (e293m), or about five percent of the expected total, is allocated but early indications show investors are opting for well-known managers and for hi-tech and medical funds. Roburs, the asset management arm of Foreiningensparbanken, is the runaway winner having attracted over Sek550m to date. Contura its medical fund has been the top performing fund in Sweden since 1996 and has proved the most appealing having gathered Sek171.5m as of the middle of October. Such volumes suggest brand names and recognition
are playing a large part in investors’ decisions.
Insurance group AMF, with a total of Sek220bn under management, is showing strongly with three of its funds in the top ten in terms of asset attracted. Its largest mutual fund has already attracted over Sek122m. SPP Investment Management is also performing well with four funds in the top twenty totalling Sek170m..
Sweden’s population has been deluged with radio, billboard and television advertisements and AMF has even sponsored the weather forecast on one of the national channels. Under the PPM system, Sweden’s workforce of 4.4m has the choice of 455 funds to which they are obliged to invest 2.5% of their gross salary. Those deciding not to select a fund or funds will automatically end up at the 7th fund, the default fund. It’s too early to tell what percentage will take this option but Richard Grottheim, executive vice president of the fund says up to a third may opt for the default fund, giving it a total of Sek20bn.
Distribution of money into the funds has been remarkable. Despite it being early days, every fund on offer has managed to attract money.

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