The Swedish Fund Selection Agency (FTN) has reported a modest improvement in returns following its premium pension overhaul, with procured European index funds outperforming the previous offering by 0.29 percentage points in their first year.

The funds, which have been available since January 2025, made an average return of 4.85 per cent in their first year. The previous fund offering achieved a slightly lower return of 4.56 per cent during the same period.

Among the procured funds, Storebrand Europa and Handelsbanken Europa Index Criteria performed the strongest, both with a return of 5.4 per cent.

FTN head of communications, Viktor Ström, explained: “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.”

The funds excluded by FTN were Länsförsäkringar Europa Index, DNB Europa Indeks and Öhman Marknad Europa. Of these, Länsförsäkringar Europa Index performed the weakest, with a return of 2.7 per cent over the period.

FTN stressed that differences in returns between index funds are often due to the funds tracking different indices.

The fact 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, it stated.

This marks the second procured fund category to reach a 12-month track record, following actively managed European equity funds, where average returns rose by nearly 1.5 percentage points in 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,” Ström said.

However, FTN executive director, Erik Fransson, said that one year is too short 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 SEK 1,000 more per month in pension for life for millions of Swedes.”

FTN has also announced that healthcare and biotech will be the next fund category to be procured for the premium pension fund platform.

There are currently 11 actively managed healthcare and biotech funds on the platform. The category comprises total assets of approximately SEK 29bn, and the procurement will affect around 250,000 savers.

It will be FTN's 14th procurement and is expected to be published in the third quarter of 2026.

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