If the fund invests in funds managed by the Fund Management Company, the fund manager is compensated for the fixed management fee and any performance fee in the underlying fund. When the Fund Management Company’s fund of funds invests in funds managed by other fund managers (external fund managers), the fund manager is compensated for the fee that each external fund manager defines as the fixed management fee in the underlying fund (management fee). The Fund Management Company has entered into agreements with certain external fund managers, whereby the Fund Management Company is entitled to a certain percentage of the fixed management fees charged for the funds’ investments in the external fund managers’ funds. In this way, the Fund Management Company is compensated for some of the management fees that it pays to the fund.
Legal Information
Information about inducements in Swedbank Robur Fonder AB
(the Fund Management Company or Swedbank Robur) offers investment products, discretionary portfolio management and investment advisory services. Compensation is paid for every management assignment. The rules for how a fund management company’s fees or non-monetary benefits (inducements) may be paid or received are governed by the Swedish Financial Supervisory Authority’s regulations. These regulations are based on an EU Directive. According to the regulatory framework, fund management companies may only pay or accept inducements for the provision of their services under certain conditions.
If an inducement is paid or issued to – or accepted from – a third party, the fee/commission or non-monetary benefit must be designed to enhance the quality of the relevant fund management activity/service to the client. It must not impair compliance with the fund management company’s duty to act honestly, fairly and professionally in the best interests of its clients. Information about the forms of inducement that occur in the Fund Management Company’s activities are set out below.
Swedbank Robur Fonder AB’s Remuneration Policy and Regulations (IPAM) are designed with the objective that the regulations will promote sound and effective risk management, and prevent risk taking that is inconsistent with Robur Fonder’s risk profile and fund regulations. The Remuneration Policy and its application are also designed so that Robur can fulfil its obligations to act in the best interests of its unit holders.
IPAM is Robur’s discretionary variable remuneration scheme, and is based on quantitative (financial) and qualitative (non-financial) criteria. The aim of IPAM is to reward employees (or fund managers) for outstanding efforts on behalf of Robur’s unit holders. Both financial (quantitative) and non-financial (qualitative) criteria are included in the assessment of an employee’s (or fund manager’s) performance. Variable remuneration is only paid if the quantitative targets related to returns, or qualitative targets related to the fund’s long-term sustainable strategic positioning, have been met. According to Robur, sustainable strategic positioning is essential for achieving a long-term, financially sustainable return on investment. This means that maximum returns cannot be generated unless both the return targets and environmental, social and corporate governance (ESG) targets have been taken into account.
Information about the forms of inducement that occur
Compensation for unit-pricing errors
Swedbank Robur Fonder AB has prepared compensation instructions for unit-pricing errors to compensate those parties who have been adversely affected. The instructions are based on the Swedish Investment Fund Association’s guidance on how the fund and unit holders should be compensated in exceptional cases where errors have arisen.
The basic principle is that all errors must be corrected and that the Fund Management Company’s compensation must return the fund and the unit holders to the financial position that would have existed if the error had not occurred. Compensation to the unit holders is paid by issuing new units in the fund, provided that the compensation exceeds SEK 100.
In order for compensation to be paid, however, the Fund Management Company always makes an assessment of whether the pricing error can be considered material. For material errors, the fund and the unit holders must always be compensated if they have been adversely affected. Unit-pricing errors resulting from a mistake or negligence on behalf of the Fund Management Company, such as incorrect fee calculation or investment of the fund’s assets in violation of the law or the fund’s rules, must always be considered material.
When determining whether errors other than those set out above are material, the fund’s normal volatility must be considered. The less volatility in the fund’s unit prices, the less errors should be considered material. The tolerance thresholds for the determination of material errors are based on the fund’s risk category (1-7 scale). The fund’s risk category is set out in the fund fact sheet and reflects the fund’s sensitivity to market volatility. An equity fund typically has a higher risk category and is therefore more volatile than a fixed-income fund, for example, which results in a higher tolerance threshold.