2022 Best Performing Swedish Article 9 Global Equity Funds Unveiled

    Stockholm (NordSIP) – Between geopolitical tensions, rising inflation and contractionary monetary policy, 2022 was not an easy year for the global economy or financial markets. Global sustainable equity markets, be it focusing on ESG integration or on impact, were no exception to this trend. Such adverse conditions caused active impact funds to experience a wide range of performances. This effect is patent in the performance of nine Swedish Global Equity funds NordSIP identified as reporting under Article 9 of the Sustainable Finance Disclosure Regulation (SFDR) for the whole of 2022.

    Sources: Swedbank Robur, SEB Investment Management, Storebrand Asset Management, Navigera, CB Fonder, Penser Fonder, MSCI, Avanza, NordSIP – Performance figures in SEK 

    Five factors seem to dominate the performance of global equity funds active in Sweden during the whole of 2022. On a macro level, as central banks increased interest rates markets shifted from growth to value in January. This style shift affect affected sustainable funds which claim to have a more long-term investment horizon.

    At the fund level, a lack of exposure to the US market and the appreciation of the US Dollar vis-à-vis the Swedish Krona during 2022 was a crucial contributor to the underperformance of certain funds. On a more positive note, fund managers mentioned on more than one occasion the contribution of selected healthcare and renewable energy investments to their ability to outperform their global benchmark.

    From Growth to Value

    “The higher interest rates and central bank policy caused a rotation from growth to value in January, which had a negative effect on the climate fund,” says Mirella Zetoun, portfolio manager of the SEB Global Climate Opportunity D SEK and of the SEB Global Equal Opportunity C SEK funds.

    “2022 was a bad year for growth stocks due to high valuations and rising inflation and interest rates. The fund is focused on the three structural growth and megatrends cleantech, renewable energy and water management, which were all negatively affected by this development. However, the fund performed better than the clean tech and renewable energy sectors. Both are very growth-tilted and therefore suffered from rising inflation and interest rates (compare for example with IT). Renewable energy is also a sector we consider that has structural issues that makes it hard to ‘buy and hold’ and therefore serves as a complement in our portfolio, i.e. when the sector doesn’t perform well you should expect us to outperform as we have a small allocation to the sector – and vice versa,” Carl Bernadotte, Marcus Grimfors and Alexander Jansson, managers of the CB Save Earth Fund argue.

    Nevertheless, investors should heed portfolio manager’s advice that global sustainable equity funds markets seem to track their broader non-sustainable benchmarks. “It became obvious during 2022 that many sustainability-focused funds do come with significant bets relative to broad equity markets. This is not necessarily a bad thing but it is definitely something investors should be aware of. With our current offering we are looking to be offer both broad and more niche products with the highest level of sustainability focus,” says Per Haldén, CIO and Portfolio Manager of the Navigera Global Change fund of funds and of the Navigera Global Sustainable Leaders global equity fund.

    For CB Fonder managers, January 2022 proved to be a particular difficult start. “All the underperformance [in 2022] was due to one month. When January 2022 is removed, the fund has outperformed its benchmark index by approximately 0.5%. We also had almost maximum cash going into 2022 (maximum is 20% and we had 17% end of December 2021) and kept that position the whole year. As all of the three sectors we invest underperformed in 2022, it would probably have required quite a lot of style-drift for us to outperform our benchmark for the calendar year,” CB Fonder’s  Bernadotte, Grimfors and Jansson add.

    Renewable Energy

    Discussing the performance of the SEB climate fund, Zetoun also emphasises the importance effect that the sanctions had on sustainable infrastructure investments. “The fossil fuel and energy sectors’ rally during 2022, due to the Ukraine war, affected the climate fund negatively in the short term but it put an even higher demand on renewables and emphasised the importance of wind and solar power to avoid energy crisis and fossil fuel dependency. This boosted solar technology investments in the funds. The US IRA  had a positive impact on the fund’s investments in clean energy technology and renewables. The covid lock-down in China caused issues in the supply chain affecting both wind and solar companies in the fund during 2022. The climate fund investments in the utilities sector and the solar technology theme drove some of the performance in 2022. Investments in companies with high quality characteristics also contributed. The underweight in energy sector had a negative impact on the performance,” SEB’s Zetoun explains.

    The difficult conjuncture that characterised the global economy reverberated through sustainable financial markets in very specific ways. “European energy infrastructure was dealt a significant blow when EU sanctions aimed at Russia were rolled out, which in turn lead to regained traction and interest towards alternative energy sources and resource efficiency. The US Inflation Reduction Act of 2022 (IRA) promised more investments in climate friendly businesses and technologies, but also acts as a strong signal on the future direction of the world’s biggest economy,” says Petter Forslund, Corporate Actions Officer at Simplicity, which launched the Simplicity Green Impact fund on May 23rd 2022.[1]

    Philip Ripman, Head of Solutions at Storebrand Asset Management and portfolio manager of Storebrand Global Solutions A fund also highlights developments in the renewable energy segment. “The renewable energy segment was the best performer in 2022, highlighting the need for more renewable energy. Meanwhile, oil and gas stocks contributed negatively to the fund’s performance vis-à-vis the benchmark. This was due to their overall market performance during 2022, and due to the fact that Storebrand Global Solutions is a fossil free fund,” Ripman adds.

    Swedbank Robur’s team were able to capitalise on these trends. “Clean energy, primarily solar but also geothermal, was one of the main drivers of the performance of both funds,” says Johan Eriksson, strategist and senior portfolio co-manager of the Swedbank Robur’s Global Impact A and the Swedbank Robur Climate Impact funds.[2]


    “The equality fund investments in the health care sector and in companies that are better than peers on gender diversity drove some of the perfor0mance in 2022. Investments in companies with low risk characteristics also contributed. Additionally, not investing in companies with bad governance and controversies related to labor rights contributed to performance,” Zetoun explains.

    “We could not have asked for more from our equality focused fund. We beat the benchmark and our peer group in a very tricky market for sustainability products that excludes fossil fuel. In the case of our climate fund we were behind the benchmark and in line with our peers a result we are content with given the performance of the energy sector post the war in Ukraine started,” Zetoun continues.

    The performance of the top performer echoes these insights. Indeed, healthcare was the top focus of the Swedbank Robur’s Global Impact A fund, accounting for 28.93% of its holdings. The importance of healthcare investments is further reinforced by the fact that the Swedbank Robur’s Global Impact was the fund manager’s second overall best-performing fund of 2022, behind only the Swedbank Robur Healthcare Fund.

    “We are very happy with our performance, especially with Swedbank Robur Global Impact A’s performance which was positive (in SEK) during a year when most stock markets were down. We consider that our focus on healthcare, primarily Biotech, but also Pharma and MedTech was one of the main drivers of this fund’s success,” Swedbank Robur’s Eriksson adds.

    Appreciating US Dollar

    Last but not least, exchange rate dynamics appear to have played a significant role in the funds performance. “The varied performance of Navigera’s funds can be explained by the details of their strategies. “Our two Article 9 funds had quite a diverse performance during 2022 and the differences between the two investment strategies became very clear. The Global Sustainable Leaders fund has a broad perspective aiming to outperform global markets by investing across many sectors as regions in companies contributing most to societal value. This creates a robust portfolio that handled market turbulence in 2022 quite well,” Navigera’s Haldén explains.

    “The Navigera Global Change (NGC) fund is also a global equity fund but it has an investment strategy where the portfolio typically ends up with a higher sector and thematic concentration. During 2022, when many Article 9 funds had a difficult year, Navigera Global Change was no exception. Since the NGC is a Fund of Funds it the depends on how you define the investments. The underlying funds are predominantly traded in US Dollar but the investments made by those funds are distributed over a wide range of currencies. For some time, the fund has been underweight US and then also underweight the USD, something that hurt the relative performance in SEK last year. We do not hedge currency risk.  Being underweight USD compared to both global market and peers the funds’ relative performance suffered last year. This has been a natural bias as the funds’ somewhat thematic approach in looking for dedicated ESG managers has lead to this US underweight,” Haldén adds.

    This factor also helps understand the successful performance of the Swedbank Robur’s Global Impact A fund, which had 53.13% of its holdings in the USA. But Swedbank Robur was not the only fund to benefit from such an exposure.

    “The decision not to hedge currency exposure provided protection against a weaker SEK at the beginning of the year. We don’t run a factor strategy as such however we have had a value and defensive tilt in the portfolio for most of the year with consumer staples, consumer discretionary and healthcare representing value in the portfolio and IT was the strongest underperformer. In terms of market cap we where mostly exposed to mega caps or large caps. In the start of the year we had more exposure to north America and over the course of the year we moved more towards Europe based companies,” Henning Wahlden, portfolio manager at Eric Penser Bank, explains.

    Going Forward

    “2023 has begun in a positive fashion – with several companies that didn’t perform so well in 2022 doing better. There will be fears of a prolonged recession in 2023 and into 2024, and continuing focus on inflation and rising interest rates. The geopolitical backdrop will be important, as we see more protectionism through the Inflation Reduction Act and the Net Zero Industry Act – and continued good political cooperation will be important for succeeding on climate ambitions. Other than that, the need for climate change adaptation, reliable access to clean energy and a more circular economy will be the key trends of 2023. The debate on how to balance a sustainable green transition against social inclusion and the fair distribution of resources wil also intensify,” Storebrand’s Ripman argues.

    According to Robert Vicsai, Senior ESG Investment Specialist and Manager of the SEB Nordic Future Opportunity fund[3], regulatory developments during 2022 increased transparency in a manner that should incentivised sustainable investments going forward. “After years of somewhat murky interpretation of the concept of sustainability in the form of ESG ratings based solely on governance models, we finally had three frameworks that will help in how we evaluate or identify sustainable business models and how we incentives them to thrive. The first is the continuously developing EU Taxonomy, the second is the agreement on the mandatory adoption of CSRD, and the third is the IRA framework. Because of these, we will have greater transparency around the sustainability of business models, focusing on sustainable economic activities related to the company’s revenue streams in connection with the introduction of double materiality and a revolutionary financial incentive around sustainable investments that will drive the necessary transformation,” Vicsai explains.

    CB Fonder is also keeping an eye out for regulation “SFDR will require more reporting as well as standardizing of both reporting and description of procedures. We will adapt the reports and descriptions to the new regulation. Since the regulation is new its interpretation is still unclear and praxis on how to report will gradually develop. Further, the EU Taxonomy will be finalized and the reporting of that will be developed as well, both by companies and funds. These will be two focus areas for us during 2023,” CB Fonder’s Bernadotte, Grimfors and Jansson conclude.


    [1] Due to its launch in the middle of the year, the Simplicity Green Impact fund was not included in the analysis for 2022.

    [2] Eriksson is also the co-manager on the Swedbank Humanfond. The fund is also an Article 9 SFDR fund but changed strategy during the year from a Swedish equity fund to a global impact fund and was thus excluded from consideration in this market review.

    [3] The SEB Nordic Future Opportunity fund was excluded from this analysis due to the fact that its coverage is exclusively Nordic.


    Image courtesy of © NordSIP
    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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