What do we invest in
under Danica Balance Sustainable Choice?

With Danica Balance Sustainable Choice, your savings are invested in selected equities and corporate bonds from companies with a special focus on sustainability, in sustainable bonds and in alternative investments in renewable energy, for example.

We invest in sustainability in a broad sense, meaning we select companies that are actively contributing to making a difference within areas such as climate, environment, health, food production or other social aspects and that are thus supporting the UN Sustainable Development Goals. The companies we invest in may already be ‘best in class’ in relation to sustainability, or they may be companies that still have some way to go but are moving in the right direction.

Danica Balance Sustainable Choice also comprises portfolios of Danish, global and emerging market equities. Based on market indices for the various areas, we have selected companies that are willing to adjust their business model and their greenhouse gas emissions in accordance with the goals of the Paris Agreement. We exclude companies with an overall weak performance in relation to a number of different sustainability parameters.

We do not invest in alcohol, fossil fuels, gambling, controversial weapons, military equipment, pornography or tobacco, or in companies with questionable norms or ethical standards, for example.

How we select investments

Danica Balance Sustainable Choice invests in a number of new investment funds that provide the same level of risk as under a general Danica Balance scheme. The funds only comprise investments with a special sustainability focus, however.

To achieve the same level of risk through the sustainable investments we offer, Danica Pension Mix Sustainable Choice and Danica Pension Defensiv Sustainable Choice both comprise slightly more equities than the corresponding funds under a general Danica Balance scheme.

The chart below shows the investment distribution in the three primary funds under Danica Balance Sustainable Choice: ‘Danica Pension Offensiv Sustainable Choice’, ‘Danica Pension Mix Sustainable Choice’ and ‘Danica Pension Defensiv Sustainable Choice’.

 

Danica Pension Offensiv Sustainable Choice

Danica Pension Mix Sustainable Choice

Danica Pension Defensiv Sustainable Choice

Danica Pension Offensiv
Sustainable Choice

Danica Pension Mix
Sustainable Choice

Danica Pension Mix
Sustainable Choice

Equities with a sustainability focus
Actively selected equities
Equities from indices

Learn more

Sustainable bonds
Green bonds
Social bonds
Sustainability bonds

Learn more

Credit bonds with a sustainability focus
Investment grade corporate bonds
High-yield corporate bonds

Learn more

Alternatives with a sustainability focus
Investments in projects with a focus on renewable and clean energy
Micro loans

Learn more

What do you not invest in under
Danica Balance Sustainable Choice?

In Danica Balance Sustainable Choice, we also exclude a number of companies that we do not invest in. This comprises companies involved in the following business areas:

 


Alcohol
Companies with 5% or more of their revenue generated from alcohol.


Norm-based restrictions
We may decide to implement investment restrictions against companies with questionable norms or ethical standards, or if our active ownership does not lead to positive changes over time.


Fossil fuels
Companies with 5% or more of their revenue generated from fossil fuels.


Gambling
Companies with 5% or more of their revenue generated from gambling.


Controversial weapons
Companies involved in controversial weapons. This includes cluster munitions, anti-personnel mines, biological and chemical weapons as well as nuclear weapons.


Military equipment
Companies with 5% or more of their revenue generated from military equipment.


Pornography
Companies with 1% or more of their revenue generated from pornography.


Tobacco
Companies with 5% or more of their revenue generated from tobacco.


Your investments under your general Danica Balance scheme are also subject to some of the above restrictions.

Learn more here (In Danish only)

 

It is the market standard to apply a 5% threshold for companies’ revenue generated from products or activities such as tobacco or fossil fuels. Revenue thresholds are used in, for example Swan eco-labelled investment funds or the climate group Ansvarlig Fremtid. The reason that the thresholds are higher than 0% is that the determination of revenue generated from activities is subject to some uncertainty.

A threshold of 5%, for example, has been accepted as the market standard because it ensures that we do not invest in companies with significant activities within fossil fuels, for example, while we avoid excluding companies that do not have significant activities in such areas and whose operations and revenue stem from an entirely different area.

What investment strategies can I choose from?

You can choose the same investment strategies under Danica Balance Sustainable Choice as under your general Danica Balance scheme. Learn more about our investment strategies here. It is up to you what percentage of your savings you want to place in Danica Balance Sustainable Choice.

What can I expect in terms of return?

In Danica Balance Sustainable Choice, we fully focus our investments on sustainability and exclude companies, investments and asset types if they fall short of our sustainability criteria. We also refrain from making investments in companies if we do not have enough data to sufficiently assess whether they are sustainable. For the time being, it is therefore not possible for us to achieve the same diversification of investments as is the case under your general Danica Balance scheme.

This means that in the shorter term you should expect a lower return under Danica Balance Sustainable Choice at the same level of risk as under your general Danica Balance scheme. We generally expect to see a larger gap in returns for investments with a low-risk profile than for investments with a high-risk profile. In the long term, we believe that the expected returns on the two Balance schemes will converge.

The Danish Council for Return Expectations regularly updates its official expectations as to risk and expected returns for various types of investments. Below, you find the expected returns for a general Danica Balance scheme and Danica Balance Sustainable Choice, respectively, based on the Council’s expectations.

See actual returns here (In Danish only)

  • Mix high risk profile

    Mix high risk profile

    The figures show the expected return under Danica Balance Sustainable Choice and the expected return under your general Danica Balance scheme with the same risk profile. The figures illustrate a theoretical projection of the return based on the Danish Council for Return Expectations’ current expectations of general market developments. The actual return may be higher, equal or lower.




  • Mix Medium risk profile

    Mix Medium risk profile

    The figures show the expected return under Danica Balance Sustainable Choice and the expected return under your general Danica Balance scheme with the same risk profile. The figures illustrate a theoretical projection of the return based on the Danish Council for Return Expectations’ current expectations of general market developments. The actual return may be higher, equal or lower.

  • Mix low risk profile

    Mix low risk profile

    The figures show the expected return under Danica Balance Sustainable Choice and the expected return under your general Danica Balance scheme with the same risk profile. The figures illustrate a theoretical projection of the return based on the Danish Council for Return Expectations’ current expectations of general market developments. The actual return may be higher, equal or lower.

What if I have a guarantee attached to my pension scheme?

You can choose Danica Balance Sustainable Choice even if you have a guarantee attached to your pension scheme. With an active guarantee, however, not all investment funds will currently be available to you with specific focus on sustainability. If you have a general Balance scheme with an active guarantee, you will invest in Danica Pension Offensiv and in one or more special bond funds with different interest rate sensitivities:

  • Danica Pension Korte Obligationer
  • Danica Pension Lange Obligationer
  • Danica Pension Ultralange Obligationer

Your investments in these funds are necessary in order for us to provide you with a minimum payout guarantee. The funds invest in traditional government and mortgage bonds. There is not at present a sufficient selection of sustainability bonds for us to be able to offer adequate management of sustainable versions of Danica Pension Lange Obligationer and Danica Pension Ultralange Obligationer, so we will continue making investments in traditional bonds under Danica Balance Sustainable Choice. However, there are enough sustainability bonds for us to offer a sustainable fund – Danica Pension Korte Obligationer Bæredygtigt Valg – that only invests in short-term sustainable bonds.