Danish love affair with fixed income supports portfolios amid equity volatility
Danish investors have proportionately more in bonds than any other European developed market, and this has benefited them in the current period of equity volatility, says industry association InvesteringsForeningsRådet.
The Federation of Danish Investment Associations has analysed data from EFAMA, the European Fund and Asset Management Association, which it says shows that DKK56 in every DKK100 invested in the local Investment Associations goes to bonds.
This is well above the European developed market average equivalent to DKK27, the analysis suggests. Other countries compared included: Spain, Italy, Luxembourg, Norway, Germany, Netherlands, UK, France and Sweden.
“This means that investors’ portfolios have been well padded by bonds during the recent stock market turmoil,” the Federation said.
The local market tendency is also visible in products focused on short-term fixed income instruments. Danish investors also like money market funds, and when added to levels of investments in typical bond funds, the Danes still come out on top when comparing overall investments in fixed income across Europe, the Federation said.
“This has benefited them during the turmoil in August, because bonds have been robust, but equities have fallen. Only investors from countries such as Turkey and Rumania have a larger proportion of ‘safe investments’ than Danes,” the Federation said.