Money market funds gain as Swedes move out of equity in August

The amount of net redemptions from equity funds overshadowed the net inflows into other types of funds in Sweden in August, reports the Swedish Investment Fund Association (Fondbolagens förening).

Net outflows from equity funds hit SEK35bn (€3.9bn) while money market and bond funds saw strong inflows amounting to a net SEK29bn (€3.2bn).

Money market funds alone saw net inflows of SEK22.5bn (€2.5bn), the figures show.

However, across all types of investment funds the industry recorded a net outflow of SEK8.1bn (€909m).

Assets under management represented by the Association’s members at the end of August stood at SEK1,797bn (€202bn)

“The figures for August were what we expected, an extremely large flow out of equity funds. It is about the need for political coordination to handle the debt problems of Europe and the US, the future of the euro and the situation in the employment market. The big swings on stock exchanges around the world are testing investors’ patience. My advice remains that after a downturn there is an upturn, and for investors this means that saving monthly in funds spreads risk over time, with advantages when the upturn comes. It is always good to review one’s investments, but one should not act in panic. Equity funds should always be viewed long term and it is important to have a good spread of risk across one’s capital,” said Association managing director Pia Nilsson.

Swedish investors were particularly hard against Sweden funds, which as a sector saw the biggest net redemption of SEK11.3bn (€1.2bn). It still remains the biggest sector by assets under management, worth SEK264bn (€29bn).The Association’s figures may reflect the general mood of the country, which is that key stocks are going to be tested by any return of global recession because of their sensitivity to export markets.

Proportionately East Europe sector funds were hit harder, with SEK4.2bn taken out on a net basis, leaving AUM of some SEK55bn (€6.1).

 

Net investments SEKbn

August Jan-Aug 2011
Equity funds -34.8 -51.2
Mixed funds -2.2 10.5
Bond funds 6.1 9.9
Money market funds 22.5 32.6
Hedgefunds 0.4 2.5
Other funds 0 0
Total -8.1 4.2

 

 

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