The Swedish Fund Selection Agency (FTN) has revealed the preliminary procurement specifications for the procurement of actively managed Swedish equity funds with a primary focus on large and mid-cap companies and Swedish index funds with a primary focus on large and mid-cap companies.

The procurements will be carried out in parallel and notice is planned to be made after the summer. FTN said the procurement of actively managed Swedish equity funds covers approximately SEK 88bn in premium pension assets, while the Swedish equity index funds covers approximately SEK 55bn. In total, the two procurements affect just over one million savers.

Furthermore, the tender for actively managed funds has a minimum permitted active risk of 2 per cent relative to the fund's benchmark index, while the procurement of index funds has a maximum permitted active risk of 2 per cent relative to the fund's benchmark index.

The category index in both procurements is six portfolio return index (SIXPRX). There is no active risk limit between the fund's benchmark and the procurement's category index. Both procurements are for UCITS funds with trading currency in SEK.

Currently, there are 34 funds in the Sweden category on the premium pension fund platform. Of these, 23 are actively managed funds and 11 are index funds. FTN’s decision means that these groups are handled as two separate procurements.

“Fund managers wishing to participate in both procurements need to submit separate tenders. In connection with the announcement of the procurement, the fund agreements will be terminated for funds in the existing category, but the funds will remain on the fund platform until the procurement is completed,” FTN stated.

FTN said it had shared the preliminary procurement specifications to give potential tenderers the opportunity to prepare and submit questions and comments. The final and governing specifications will be presented when notice is made for the procurement.

---