Passive Sweden equity funds lead way YTD

Passively invested Sweden equity funds have done well in 2013 so far, according to data and analysis provided by Morningstar and published by daily Dagens Industri.

Seven of the 10 best performing such funds as of data to 27 June were passively managed or index funds.

Jonas Lindmark, head of analysis at Morningstar in Sweden is cited by the paper saying that he is not surprised, given the performance of index funds over time.

Morningstar used the SIXPRX index as a benchmark as it includes dividend payments to investors such as funds. Over the first six months of the year it rose by 10%. Just three broader Sweden equity funds beat this: Spiltan Aktiefond Investmentbolag – a passive fund invested in investment companies that can benefit from leverage when the market rises – which gained 13.6%, Carnegie Sverigefond (12.1%) and Carnegie Swedish Equity Fund (12%), both actively managed by Simon Blecher (pictured).

He responded by noting that six months is too short a period to properly evaluate the performance of funds, but that his focus remained on companies with good cashflow and high dividend yields; the sorts of companies that have done well in an environment of low interest rates and low economic growth.

All of the 10 worst performing Sweden equity funds over the period were actively managed, the Morningstar data showed. This includes funds from SEB, Länsförsäkringar and Nordea.

Lindmark said that retail investors in Sweden should avoid broader actively managed Sweden equity funds. Instead they should buy index funds to access large cap firms, and actively managed smaller companies funds to access the smaller companies sector.

The data suggests that 26 smaller companies funds have gained more than 10% over the period, with Odin Sverige the best performing fund with a gain of about 17%, Dagens Industri noted.


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