Norwegian fund industry hits new AUM high in 2012
Annual figures published by the Norwegian Fund and Asset Management Association show that total assets across all types of funds grew by NOK73bn (€9.8bn) to hit a new record of NOK558bn (€75.4bn)by the end of 2012.
Net investments were NOK41.6bn (€5.6bn), of which Norwegian institutional clients accounted for NOK29bn, and Norwegian retail investors and foreign investors accounted for NOK6.3bn each.
Investors predominantly sought out fixed income, with bond funds attracting a net NOK31bn, and other fixed interest funds taking NOK12bn. This was significantly higher than equity funds, which attracted NOK7.2bn net.
Retail investors invested a net NOK5.3bn into bond funds, but it was the weight of Norwegian institutional money into this asset class that was really felt by the industry; some NOK24.8bn (€3.4bn) was invested in bond funds by institutions.
Bond funds now account for more assets under management than equity funds among Norwegian institutional investors, the figures show: NOK108.9bn (€14.7bn) versus NOK104.7bn (€14.2bn).
In contrast, money market funds hemorrhaged money, with retail and institutional investors collectively redeeming a net NOK-11bn (€-1.5bn).
Lasse Ruud, managing director of the Association, said: “The funds year 2012 was characterised by by the fact that higher risk funds also provided higher return, and where equity funds offered slightly higher return than the historical average.”
“Since the financial crisis, funds have had relatively good returns and record levels of net investments. That is why the assets under management across all types of funds are close to 30% higher than the level preceding the financial crisis,” Ruud added.
The Association’s also published figures showing that just 22% of active funds beat their index over the past year.
The figures are better over longer periods of three, five and 10 years, with ratios respectively of 36%, 73% and 71%.
The Association added that it did not have an answer to the question whether active or passive funds were better for investors, as that would depend on the investors. But, it said that both active and passive funds would remain on offer as long as there was market demand for them.