Sustainability risks are integrated into the investment decisions, but the fund does not promote environmental or social characteristics or have sustainable investments as its objective.
How are sustainability risks integrated into the investment decisions?
Pursuant to regulations, a sustainability risk is an environmental, social or corporate governance event or condition that, if it occurs, could cause an actual or a potential significant adverse impact on a company's value.
The fund is a fixed income fund that makes investments primarily in real and nominal government bonds and treasury bills that are issued in SEK and are included in the OMRX Real Return Bond Index (OMRXREAL). The fund integrates sustainability risks into the investment decision through the asset's fulfillment of the exclusion criteria applied by the Management Company. The Management Company uses an internally-developed country model to assess the sustainability risks in relation to the Swedish government. The sustainability risks are managed primarily by regularly controlling that the underlying assets meet the exclusion criteria applied by the fund, as well as through active stewardship with engagement dialogue , where possible.
The Management Company concludes that the management of sustainability risks through regular control of applicable exclusion criteria, the Management Company's country analysis, as well as active stewardship through engagement dialogue, where possible, will provide higher risk-adjusted returns over time.
Consideration of principal adverse impacts on sustainability factors
The fund manager takes into account the principal adverse impacts on sustainability factors (PAI). This is conducted through the PAI tool developed by the Management Company and specifically designed for government bonds, which identifies and analyses any adverse impacts. The measurement values for a number of different key figures are controlled based on defined rules and give an indication of their level of risk relevance and severeness. The analysis can result in the management of potential adverse impacts through engagement, wherever possible. The quality and accessibility of the data also currently affects the integration of principal adverse impacts on sustainability factors in fund management, and this is managed by escalating a greater number of issues for a more in-depth manual analysis. Disclosures on the principal adverse impacts on sustainability factors will be reported in the fund's annual report, which is available on the Management Company's website.