Swedish companies invested some SEK10.6bn on a net basis in money market funds through the first quarter, while households instead withdrew some SEK2.6bn on a net basis from such funds, according to figures from the Swedish Investment Fund Association (Fondbolagens förening).
Households predominantly saved through unit linked insurance products, and the so-called investment savings account (Investeringssparkonto, ISK) which offers individuals a tax efficient wrapper. Both unit linked and ISK savings were focused on balanced funds through the quarter. Together these two vehicles for investing acounted for some SEK10.1bn in net flows during the quarter, although households withdrew some SEK9.9bn in direct savings.
The Association said that one possible reason for companies selecting money market funds despite low interest rates is that in contrast to households, in certain cases they must pay to keep money on deposit. Sweden’s central bank decided on 27 April to keep its repo rate unchanged at -0.5% along with a commitment to buy government bonds as part of its measures to stimulate inflation.
Swedish companies had some SEK524bn (€57bn) invested in funds as at the end of March.