Tax wrapper dominates Swedish fund investments in Q3
Investments via so-called ISK, a type of tax efficient savings account, dominated net investments in the third quarter of 2016, according to the latest quarterly industry figures published by the Swedish Investment Fund Association.
The ISK (Investeringssparkonto) was launched in 2012 to facilitate investments in instruments such as fund shares, in a way that means capital gains are taxed at a different rate than investments made not using the account – which thus operates as a kind of tax wrapper around holdings within it.
The latest quarterly figures mean that ISK-based fund assets now account for some 7% of total fund assets held, which are calculated at some SEK3.347trn (€338.5bn). The premium pension (PPM) system accounts for some 27% of assets held, the biggest share of the Swedish investment fund market.
Unit linked fund investments account for 25% of the investment funds market, while direct saving by households account for 14%. Swedish company investments account for 11%, the figures suggest
However, there are noticable differences between the traditional equity and bond fund classes. Unit linked investments account for a whopping 94% of net investments in equity funds this year to the end of the third quarter. Yet PPM dominates here too still, with a market share of 34%, according to the figures on total assets under management.
For bond funds – excluding short term interest rate funds – the situation is somewhat reversed, with PPM so far this year accounting for the biggest share, 43% of net investments made, against a leading maket share of 18% held by unit linked investments.