Technicals set to improve Sweden fund five year performances

Five years ago the Swedish market hit a peak before starting a sharp slide downwards – and this is set to make five year performance records of Sweden equity funds look increasingly attractive.

However, investors need to be made aware of this technical aspect to the performance figures, which many of the big local banks are keen to put forward to investors, reports daily Dagens Industri.

Many of the banks have insisted on advising customers that their Sweden funds are unsuitable for those with an investment horizon shorter than five years. This has previously weighed against their interest, because the stockmarket was higher then that it is today.

But going forward the ratio will change to reflect the poorer performance of domestic equities following the 2007 peak, making today’s values look better.

That will be reflected in five year fund performance figures, the paper noted.
It quoted fund analyst Walter Nunez at financial intermediary Söderberg & Partners saying that investors instead should be looking at what funds manage to stand up when the stock market falls. 

According to figures from the Swedish Investment Fund Association (Fondbolagens förening), the Sweden equity funds category remains one of the most popular among Swedish investors.

It’s figures for June suggest that Sweden equity funds accounted for some SEK269.4bn (€31.7bn)of assets under management in the funds represented by the Association, out of a total of about SEK987.5bn (€116.4bn)allocated to equity funds.

However, during June there was a net outflow of SEK2bn from the class, as local investors turned increasingly to bond funds.


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