Swedish equities in focus as SFEI publishes latest research.

Swedish equities are clearly preferred to broader European equities, according to the latest research by Svenskt Fondexpertindex (SFEI) into the thoughts of fund professionals actively managing some SEK340bn (€39bn) in assets.

The latest in the semi-annual reports from SFEI goes on to state that the views on markets and industry trends expressed by managers is subject to the caveat that is the solution to the ongoing European sovereign debt crisis.

If a solution is found then equity markets could go higher, if the crisis persists it will overshadow markets.

Peter Beckman, deputy managing director for SPP Fonder, which helped produce the report, said: “That Sweden is considered the leading, or perhaps least uncertain, choice is probably based on the big stock market fall so far this year, which has led to a more attractive valuation of many companies.”

Six months ago the consensus outlook for equities was weak, and this remains the case. Meanwhile, alternative investments have been identified as an important trend in coming years.

The current uncertain and hard to judge stock market environment makes it wise to look over the level of diversification in investors’ portfolios, added Beckman. The views of experts are more nuanced than previously, and the are not just looking for a split between equities and fixed income.

Some 70% of those questioned for the research believed that there is a need to follow up on high frequency trading (HFT), and 25% want to introduce a limit on this type of trade.

Those working actively with selection and fund investments believe that HFT is insufficiently regulated, Beckman said, which is a view SPP shares in terms of doing what is necessary to restore confidence in the stock market. “The Swedish Financial Supervisory Authority’s (Finansinspektionen) ongoing investigation is a first step in this direction, but hardly sufficient in and of itself,” Beckman said.

SFEI’s market reports are produced by Laika Consulting on behalf of Norwegian financial services company Storebrand and its SPP funds brand. The qualitative research is based on interviews with persons responsible for or actively engaged in valuing and investing in funds with active mandates.


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