Corporate bonds in demand through Swedish summer months, says Skandia
Swedish bank and insurer Skandia says that nine in 10 fund switches made over the summer by its customers were to bond funds, predominantly corporate bond funds.
Emerging market and Sweden funds accounted for the majority of sales.
Jim Rotsman (pictured), chief investment management, said that the local stock market had served up a mixed set of performances, which in light of poor newsflow may have suggested a weaker market than was the case.
“This has lead investors to primarily select corporate bonds. With record low interest rates globally classic bond funds offer fairly poor returns, and that is where corporate bonds can be an interesting alternative.”
As in previous months, investors have above all avoided high risk equity funds, although there are exceptions.
Among emerging market funds, those being sold are predominantly Russia, India and China funds. At the same time there is a lot of interest in Turkey funds, according to Skandia’s data.
Among Sweden funds it is smaller companies funds that have borne the brunt of a tough summer, although broader Sweden funds have done better.
According to Skandia’s data the most bought fund sectors in June through August were bond funds, balanced funds, and non-profit or charity funds (where investors give over part of the return for causes such as research).
The most sold were emerging market equity funds, Sweden equity funds, and Asia equity funds.