Länsförsäkringar brings index funds home but keeps eyes on Paris

The Swedish insurer has changed to Paris-aligned indices which the firm believes will cut the CO2 emissions of the portfolio in half.

Swedish insurer Länsförsäkringar has several more passive funds which could potentially also be brought in-house at a later stage. | Photo: PR

Swedish pensions and insurance company Länsförsäkringar has decided to build up its own in-house management of index funds. As a result, its own two passive funds Länsförsäkringar Global Indexnära and Länsförsäkringar Sverige Indexnära (a global and Swedish equity product respectively, -ed.) will be taken off of BlackRock’s hands and managed within its own organization.

The two funds will also get a new benchmark. Going forward, they will be managed according to a Paris-aligned index.

“This benchmark has CO2 emissions that are 50% lower than the previous one,” Peter Svalstedt, portfolio manager for the two funds says in a statement.

In a follow-up call with AMWatch, he explains the reasons behind bringing these two products in-house.

“We’ve decided that these two funds should follow our own sustainability vision and therefore be aligned to the 1.5 degree goal. That’s why we’re switching to a climate aligned benchmark developed by Morningstar and in connection with that we wanted to bring the funds in-house,” he says, and explains further:

“We no longer see a reason to outsource the management of these funds when we have the resources to do it well ourselves.”

The domestic equity fund, with 120 holdings, has already been switched to the new benchmark, with the global fund next in line.

Länsförsäkringar has several more passive funds which could potentially also be brought in-house at a later stage.

“We are constantly evaluating our fund offering. If we come to the conclusion that we lack something or if we believe that we can manage the funds ourselves in an efficient way, then we’ll adapt to that,” he says.

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