Sweden’s AP7, the country’s state premium pension provider, has reduced the management fee of the AP7 Equity Fund.

The fee will be reduced from 0.08 per cent to 0.075 per cent on 1 January 2021. It said that its fees are continuously reduced whenever possible, as AP7 is a government agency and therefore non-profit.

The sole objective is to manage the money for savers who do not wish to make an active choice in the premium pension system, it said. AP7 Såfa is designed to complement the state income pension, with greater risk diversification and potentially higher investment returns.

“We have a responsibility to gradually reduce the fee whenever we can. Over a ten-year period of fee reductions, we have also improved AP7 Såfa into an increasingly sophisticated product, while continuously developing our role as an active owner in the sustainability work,” AP7 CEO, Richard Gröttheim, said.

The last time the fee was reduced for the AP7 Equity Fund was in January 2020. The fee for the AP7 Fixed Income Fund remains unchanged at 0.04 per cent.

The average fee in AP7 Såfa has more than halved since 2010, from 0.13 per cent to 0.06 per cent. The management fee of the AP7 Såfa portfolio is related to the management fees of the AP7 Equity Fund (fee 0.075 per cent) and the AP7 Fixed Income Fund (fee 0.04 per cent), and varies between the age groups, since AP7 Såfa is automatically adapted to each individual saver’s age.

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