Swedish Investment Fund Association responds to data on funds underperforming
The Swedish Investment fund Association has responded to press reports in Sweden, which suggest that four out of ten fund investments lead to losses over a period from 2000-2013.
The data, published by local newspaper Aftonbladet, looked at 40 funds, and reviewed the performance of a one-off SEK100, 000 (€11,523) investment made in 2000.
According to Aftonbladet, the inflation adjusted value of the sum today would be SEK120,628. According to this method, any fund that has not returned at least SEK20,628 (€2,379) over the period has resulted in a loss for investors.
However, the Associations’s chief executive Pia Nilsson has responded on several points. Firstly she notes that the method used by Aftonbladet assumes investors would only make a lump sum investment. However, the Association’s own data points to monthly investments being the norm in the retail market.
The newspaper’s method also assumed that investor put their money into funds just at the time of the dot.com crash took place, which would also affect subsequent returns.
Further noted is that money placed in deposit accounts over the period would also have failed the method applied – savers would be out of pocket adjusted for inflation too.
Nilsson argues that of the 40 funds, some 34 have actually made positive returns over the period. Using a slightly different period of 1998-2012, the Association has found that the average return from an equity fund has been 97%, while Sweden equity funds have returned 182% on average.
For the average retail customer investing SEK500 monthly over the period 1998-2012, the total capital invested of SEK90,000 (€10,379) would have turned into a value of SEK155, 000 (€17,876), the Association’s figures suggest.