Nordea merges long running Sverigefond into Swedish Stars
Nordea Funds AB is to merge its Nordea Sverigefond, launched in 1978, into its Swedish Stars fund from 14 June.
An announcement on the merger has been posted by the Swedish Pensions Agency noting that selection of the Sverigefond, a Sweden equity fund, will no longer be possible via the Agency’s PPM fund platform from 19 May.
A note provided to customers of Swedish insurer Länsförsäkringar via MFEX Mutual Funds Exchange AB dated ‘March 2014’ suggests the reason for the merger is that Nordea feels the Sverigefond has not performed to its satisfaction.
The merger has been cleared by local regulator Finansinspekitionen (the Swedish Financial Supervisory Authority).
The regulator has also cleared a change to the mandate of Swedish Stars, launched in 1999, which will be able to invest up to 25% of its portfolio in other Nordic markets. Previously it was restricted to investing in the Swedish equity market.
A new management team is expected to be in place to lead Swedish Stars by the autumn, the note to Länsförsäkringar customers also states. Currently, Mathias Leijon och John Hernander manage both funds.
The new portfolio is expected to result in lower actual fees paid by investors; Swedish Stars can take a fee of up to 2% according to its current mandate, but the actual fee is around 1.5%. Nordea expects this to fall to 1.4% following the merger.
Swedish Stars had AUM of about SEK3.5bn at the end of March this year. The Sverigefond had AUM of some SEK10.5bn, according to data on Nordea’s Swedish website. This suggests the joint portfolio value will be about SEK14bn (€1.6bn).