Stock-picking boutique Protean Funds is set to officially challenge passive investing with the launch of its third fund, Protean Aktiesparfond Norden, on April 1. With Richard Bråse as lead Portfolio Manager, the fund aims to combine the cost-efficiency of index funds with the outperformance potential of active management. Investors benefit from a competitive annual fee of 0.5 percent for direct investments (0.75 percent via platforms like Nordnet and Avanza), with the possibility of further fee reductions as assets under management grow.
“With a significantly lower fee, Aktiesparfonden will have an unfair advantage to typical actively managed funds when it comes to generating long-term returns,” argues Pontus Dackmo, CEO and Investment Manager at Protean Funds. He highlights a fundamental yet often overlooked principle: “One percentage point may seem small, but over time, that percentage point compounds and has a monumental impact on total return.” According to Dackmo, the concept behind this new fund is deeply rooted in Protean Funds’ philosophy: “We manage capital the way we want our own capital to be managed.”
With a significantly lower fee, Aktiesparfonden will have an unfair advantage to typical actively managed funds when it comes to generating long-term returns.”
Pontus Dackmo, CEO and Investment Manager at Protean Funds.
The security selection process for the new fund led by Richard Bråse will focus on Nordic companies with proven business models, strong returns on capital, and profits that translate into cash flow. “By avoiding companies with unsound financial risk-taking, aggressive or dishonest accounting, and misdirected capital allocation—three factors that often go hand in hand—we reduce the risk of spectacular missteps,” argues Dackmo. The ultimate goal for Protean Aktiesparfond Norden is to deliver returns that exceed the stock market over time –but, as Dackmo puts it, “in an unspectacular manner.”
Aktiesparfonden, or the Equity Savings Fund, is not about chasing short-term price movements, stresses Pontus Dackmo. “We invest because a company’s value creation will translate into strong long-term returns if we pay the right price,” he explains. “It all comes down to buying the right business at the right price. If we are more right than wrong, the outcome will be good.” The fund will be structured as a daily-traded UCITS fund, holding 40 to 50 stocks with an investment horizon of over ten years, resulting in a turnover of just 4-5 stocks annually.
“We invest because a company’s value creation will translate into strong long-term returns if we pay the right price. It all comes down to buying the right business at the right price.”
Pontus Dackmo, CEO and Investment Manager at Protean Funds.
Protean Aktiesparfond Norden is the latest addition to Protean’s fund lineup, joining the equity hedge fund Protean Select and the long-only Protean Small Cap. Managed by founders Pontus Dackmo and Carl Gustafsson, Protean Select is a return-driven hedge fund employing a long/short strategy in Nordic equities, aiming to compound capital steadily while avoiding significant drawdowns. Meanwhile, Protean Small Cap serves as its higher-risk counterpart, following a long-only approach focused on small- and mid-cap equities.
The newest fund relies on a low-cost, actively managed long-term Nordic equity strategy designed to outperform the index. “Our middle way of sharing the scale advantages as the fund grows by lowering the fees is the best compromise we can come up with and we hope it eventually will become a true challenger to both active and passive funds alike,” concludes Dackmo.
