Following a year when it increased AUM by 33% against the previous year, SPP Funds, the Swedish fund provider that is part of Norwegian group Storebrand's multi-boutique model, has said it believes the demand trend for sustainable funds as well as index funds is set to be sustained through 2020.
SPP Funds saw net inflows of some SEK19bn (€1.8bn) through the past year, taking AUM to SEK246bn (€23.2bn) by the year's end. The inflows accounted for some 15% of total net inflows to the Swedish fund industry, it says, and follows several years of striving to eliminate fossil fuel exposure from all its strategies.
At the start of 2019, 12 out of 28 funds were fully fossil free, while additional steps taken through the autumn saw all companies with fossil based activities excluded from all funds in the range.
Åsa Wallenberg, CEO at SPP Funds and head of Funds at Storebrand Asset Management, said: "For us this was the natural next step. We have worked for a long time to strategically integrate more sustainability in our asset management without renouncing returns. In Sweden we also have a customer base with well developed climate plans and that have written into the investment mandate what they can and cannot be invested in. For them and other investors we want to offer climate-smart future products."
"The increased interest for index funds and sustainable funds is clearly to our advantage and we are delivering on both trends. That more people want sustainable funds is something I am convinced will hold through 2020. Our offeirng also includes active fixed interest funds, generation funds and factor funds, which makes it easy for our customers to create long term portfolios and make adjustments according to needs."
Wallenberg notes that the sustainability focus has also been a factor in the industry awards picked up through the past year from the likes of Söderberg & Partners and Morningstar.
However, the focus on sustainability must remain if the finance industry is to contribue to a successful commitment to the 1.5 degree warming target identified in the Paris Agreement. The economic system requires profitability, but also sustainability to survive in the long term, Wallenberg adds.
"It is connected. Sustainability is the single most strategic question influencing our investments, and we have as our ambition to be leading in this area. Our most important role as asset managers is to create value in a sustainable way by ensuring our customers' money is invested in companies that are part of a sustainable future. My hope is that 2020 will go down in history as the year when the finance industry was recallibrated and the realy big asset flows went in a more sustainable direction."