Danish pension company Velliv has admitted that its communication regarding the challenge of ensuring its external funds are complying with its exclusion list “could have been clearer”, following media coverage of its VækstPension Index containing credit bonds on its exclusion list.

Velliv’s VækstPension Index contains 30 credit bonds that appear on the company’s exclusion list, with their value corresponding to 0.2 per cent of the index’s investments and 0.03 per cent of Velliv’s total investments.

The pension company stated that it has worked on a solution that is expected to be implemented within six months.

Following its completion, Velliv said it would be fully compliant with the exclusion list in the VækstPension Index, in the same way as its other savings products.

VækstPension Index is a product with passive management, where both equity and bond investments have historically been placed in external funds.

When investments are in external funds, it is more difficult and potentially costly to ensure full compliance with the exclusion list, according to Velliv.

“In recent years, Velliv has worked to ensure that Velliv's exclusion list could be complied with in the entire product, at the same time that we cater to the customers in VækstPension Index's preference for price-conscious choices,” Velliv stated.

“In 2021, we took the first step and moved all shares to our own depository and thus obtained the opportunity to comply with the exclusion list for all shares in VækstPension Index. Velliv has also identified a satisfactory solution for the last small part of the product.”

Velliv said it was aware of the challenge regarding credit bonds in external funds, which has informed its responsible investment and active ownership policy.

However, following the media coverage, the pension company noted that it was aware that its communication about the challenge could have been clearer.

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