Improvements to Lysa's Equity Portfolio
Historical returns are no guarantee of future returns. An investment can go up and down in value and you may not get your full investment back.
The equity portion of Lysa's investment portfolio goes from one to three funds
At Lysa, we always strive to improve our customers' savings. The Equity fund (“Lysa Aktier”), which makes up the equity part of Lysa’s investment portfolio, is now moving from being a fund-of-funds to becoming a global index fund, Lysa Global Equity Broad, which invests in around 1,400 companies in developed markets. This fund will be managed directly by Lysa.
As part of this change, we are also launching, in partnership with Vanguard(1), two new funds(2):
Together, these funds will make up the equity portion of Lysa's investment portfolio. Our customers' money is invested as broadly as before in about 7,000 companies, which covers a significant part of the global stock market.
Three funds simplify monitoring and diversify risk
This change means greater simplicity, measurability and transparency. When each fund can be directly compared to its relevant index, it becomes easier to track performance. Having three funds instead of one also spreads risks further. This provides better protection against unforeseen events, such as the closure of the Russian stock market after the invasion of Ukraine. If a similar situation were to occur, a trade suspension would mainly affect the fund investing in the affected market, without affecting the whole portfolio.
The fund starts investing directly on November 19
On November 19, Lysa Global Equity Broad (formerly Lysa Aktier) becomes an index fund. We will sell fund units and invest directly in the company shares. We will also reallocate some of your capital, where approximately 20% of your holding in Lysa Aktier will be reallocated to Lysa Emerging Markets Equity Broad and Lysa Global Small Cap Equity Broad.
The change leads to a reduced fee and is automatic
As part of the change, customers investing in equities will see a fee reduction, for example, for customers holding 100% equities the fee will be reduced by 0,02 percentage points(3). This follows a reduction of 0.01 percentage points in the underlying Lysa Equity fund fee made in February 2024. You can find more information about our fees in logged in mode or at lysa.dk/fees.
The change only affects the equity part of Lysa's investment portfolio. It is automatic and you do not need to do anything.
Questions? Feel free to reach out!
If you have any questions or concerns, you're warmly welcome to contact our customer support via the messaging function. You can also reach us by phone at +46 10-551 32 30 or by email at [email protected].
Footnotes
(1) Vanguard is one of the world's largest mutual fund companies with nearly $10 trillion in assets under management
(2) The Lysa Equity fund has previously invested directly in the underlying funds.
(3) If the customer has a smaller proportion of shares, the effect will be smaller. For customers with 100% bonds, there will be no difference from the current fee
FAQ
Why has Lysa chosen to make changes to the equity portion?
The Lysa Equity fund (“Lysa Aktier”) was introduced in 2017 and has since then been managed as a fund-of-funds, which means that it is a fund that invests in other funds. There are several advantages to investing through a fund-of-funds, but there are also disadvantages, such as the fact that it is more difficult to evaluate the return against an index because each fund in the fund has its own strategy and benchmark.
When our customers save more, we get new opportunities to sharpen our management. That is why we are now changing the Lysa Equity fund from one to three funds. This means that three funds will cover different geographies and company sizes:
This means that all equity funds have a clear and relevant index to follow, which simplifies monitoring.
How do three funds spread risk better than one
We see a potential risk that future geopolitical conflicts could make equities in some markets more difficult to price. This in turn could create challenges for global funds, where these markets make up a significant proportion of the investments, which could affect fund valuations and make withdrawals more difficult. While we consider this to be an unlikely scenario, the consequences if it were to occur could be significant.
Similar situations have occurred in the past, such as when Eastern European funds were affected by Russia's invasion of Ukraine, or when Swedish fixed income funds were affected at the beginning of the Covid-19 pandemic. By investing in several different geographies, our funds reduce the risk of valuation problems in a single market affecting a larger part of our clients' savings.
How will the overall management fee affect me?
This change will result in a reduction in the total management fee for those of our clients who invest in equities. The size of the reduction depends on the proportion of savings in equity funds and the proportion in fixed income funds. You can find more information about our fees in logged in mode or at lysa.dk/fees.
Will the transactions result in a tax effect for me?
Changes within a fund do not have a tax effect for you as a customer. Therefore, the conversion of the Lysa Equity fund to an index fund will not have any tax effect. In connection with the conversion, we will also sell approximately 20% of your holding in the Lysa Equity Fund and instead buy new units in Lysa Emerging Markets Equity Broad and Lysa Global Small Cap Equity Broad. Depending on the specific tax situation in your country, the sale of the Lysa Aktier units could be deemed a taxable transaction. You can find more information about the transactions in your transaction history and you can always reach out to us if you have any questions.
When will the change be completed?
We aim to have the entire change completed within a few weeks after the process has started. On November 19, Lysa Global Equity Broad will transition to a directly managed index fund, and we expect the transition itself to take about two weeks to complete.