Swedish investors switch to fixed income in May

Large net withdrawals were made from equity funds in May as Swedish investors shifted their focus to fixed income and balanced funds, according to industry figures from the Swedish Investment Fund Association (Fondbolagens förening).

Overall net outflows hit SEK-0.7bn as total fund assets decreased to SEK1.892trn (€213bn) by the end of the month. Net outflows from equity funds hit SEK-9.7bn (€-1.1bn).

The figures suggest that roughly 40% of the net equity fund sales made during the January-April period were lost in May alone; the SEK-9.7bn outflow over the month took overall net sales in the January-May period to SEK14.2bn.

Net sales, SEKbn    
Type May Total 2012 Jan-May
Equity -9.7 14.2
Balanced 1.1 5.1
Bond 4 4.9
Money market 4.6 -8.9
Hedge -0.5 -3.2
Other -0.2 0
Total -0.7 12.1

Pia Nilsson (pictured), managing director of the Assoication, said that the decline was caused by uncertainty in European financial markets. The local stock market fell by nearly 7% in May.

Unsurprisingly given its presence in portfolios, the biggest withdrawals were made from Sweden funds. Only Global and North American funds experienced net deposits over the period.

The Association notes that it has been a challenging year for active managers in other ways too. It said that “that more than 90 percent (SEK12.9bn) of the total net inflow into equity funds in 2012 have been invested in index funds.”

 Equity funds, May 2012 Net sales SEKm Net assets SEKm
Sweden -3,174 269,311
Nordic -417 42,409
Eastern Europe -2,431 47,055
Europe -423 42,718
Global 236 238,919
Sweden & Global -742 176,084
North America 322 36,750
India -520 7,004
China -430 8,699
Japan -108 5,742
Asia -509 26,236
Other -1,240 56,293
Sector -269 40,494
Total equity funds -9,705 997,714
of which index funds 27 104,058
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