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Susanne Bolin-Gärtner interview – Evolve or die

Susanne Bolin-Gärtner has overhauled the selection philosophy at Stockholm’s Folksam Fondforsäkring, shifting the focus from ‘exotic’ to flexible funds with a wide mandate while improving ESG standards.


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First, responsibilities within the fund must be clearly defined and the management should work closely together. “It must be clear who takes the final decision,” she says. “Co-managers might work but that depends from fund to fund. Sometimes you meet managers who are like twins, having worked side by side for many years. That’s fine for us.

“But sometimes you meet co-managers who are totally different or are each in charge of separate parts of the portfolio. For me, such a set-up doesn’t really work as that looks like you have two separate funds. How do you manage risk in such a situation?”

Benchmark huggers

A manager being sufficiently active is another important issue. That’s perhaps even more the case in Sweden, where a large proportion of ‘active’ Swedish equity funds have recently been accused of being benchmark huggers. In 2014, the Swedish Shareholders Association launched a lawsuit against Swedbank Robur for selling ‘closet index funds’ posing as active funds and charging active fees.

Folksam happens to have a couple of Swedbank Robur funds included on its ‘guided selection list’ but that’s nothing to worry about, assures Bolin-Gärtner. “We don’t have any of those benchmark-hugging funds, of course. We only have the best of the best, such as their real estate, commodities and inflation-linked bond funds.”

Still, sometimes funds on her selection list have been hugging their benchmarks, forcing Bolin-Gärtner to take action. “We used to have a Brazil fund, which over a period was doing very poorly. It turned out the manager was afraid to divert too far from the bigger companies in the index. So we decided to sell that fund and merge the money our clients had invested in it into the [JP Morgan] Latin America Fund. Curiously enough, the Brazil fund was also managed by JP Morgan.”

Thanks to the publicity around benchmark huggers and the rise of index trackers, (low) fees have become more important for clients. “Some clients are very determined to have low fees,” says Bolin-Gärtner. To accommodate them, Folksam has added more index trackers to its selection list in recent years, though most clients still prefer active funds, she says.

Fees are one of the three dominant factors Folksam takes into consideration when selecting funds. The other ones are performance and sustainability.

As for the performance criterion: this has led Bolin-Gärtner to gradually introduce more ‘all-cap’ funds to her list. “An example is the Fidelity America Fund [which has an allocation of around 20% to mid and small caps, see chart 2]. When we evaluate funds, the all-caps stand out [in terms of performance]. I think this is because you can find the best opportunities if you are as flexible as possible.”

Read about Folksam’s ESG policy on page 3 of the interview