Norwegian funds see net NOK25bn invested through 2011

Figures from the Norwegian Fund and Asset Management Association (Verdipapirfondenes forening)show that a net NOK25bn (€3.25bn) was invested domestically in securities funds through 2011.

Instititional investors accounted  for NOK17.3bn of the net total invested through the year. Private investors accounted for NOK6.4bn, and foreign investors NOK1.7bn.

Despite the net increase, the value of all funds under management fell, primarily becauase of the reduction in equity values. Total funds under management dropped from NOK499bn at the start of the year to NOK494bn by the end of December.

Lasse Ruud, managing director of VFF, and a member of the EFAMA board of directors, said that the ongoing economic uncertainty and the lack of a risk premium paid by the global equity market since the turn of the Century made many wary of the this type of asset.

However, he added that it was important for investors to maintain their investments during periods of poor stock market performance, and not wait until optimism returns and share prices have gained.

“For those of us with long term savings the key question is where the stock market will be in 2020, or for that matter in 2030, not what the mood is today,” he said.

Net investment by asset class 2011 NOK bn
Equity funds -2.7
Mixed funds 1.3
Bond funds 18.6
Money Market funds 6.2
Other fixed income 1.3

 

Net investments NOK bn
2003 19
2004 20
2005 54
2006 32
2007 58
2008 -24
2009 58
2010 41
2011 25

 

Total assets under management NOK bn
2003 147
2004 181
2005 274
2006 343
2007 410
2008 292
2009 415
2010 499
2011 494

 Source:VFF

Norwegian private investors have NOK149bn under management in funds according to the Association’s data. Some NOK90bn of that is in equity.

Institutional investors have NOK267bn under management. Foreign investors have NOK69bn under management, according to the figures to the end of 2011.

Foreign investors are predominantly equity investors, with 92% of their assets in equity.

Ruud said that since 2000, the Oslo stock market made an average annual return of 8%.

For those still in two minds about whether to invest in the market, he presented figures for the period 1900-2011. During that period local equity beat local government bonds over 5-year rolling periods 67% of the time, over 10-year rolling periods 77% of the time, and over 15-year rolling periods 82% of the time.

Equity investments should be done in mind of longer time horizons of five years or more, rather than paying heed to developments over a few months or years, he added.

 

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