Finland’s latest monthly consumer confidence measure has broken records, suggesting that funds invested in sectors exposed to Finnish consumption could be set for good performance.
Statistics Finland reported that the March consumer confidence indicator hit 22.9 – double the figure recorded a year earlier, of 10.4, and close to double the long term average recorded for the statistical series of 11.9.
The latest figure is the highest recorded since 2010.
“All the four components of the consumer confidence indicator, that is, expectations of one’s own and Finland’s economy, general unemployment and the household’s saving possibilities, improved somewhat in March compared with February,” Statistics Finland stated.
“Compared with the corresponding period last year, all the components of the indicator apart from saving possibilities improved very clearly.”
“In March, consumers’ views on their own and Finland’s economy were very positive. The assessment of unemployment development was also optimistic. Consumers considered their household’s saving possibilities good over the next 12 months.”
“In March, consumers regarded the time very favourable for taking out a loan but not so much for buying durable goods or for saving. Employed consumers felt in March that their personal threat of unemployment had decreased clearly.”
“In March, 46% of consumers believed that Finland’s economic situation would improve in the coming twelve months, while only 11% of them thought that the country’s economy would deteriorate. In February, the respective proportions were 47% and 14% and 12 months ago in March 36% and 26%.”
In euro terms, the MSCI Finland index has gained 37.95% in the three years to 24 March.
The MSCI Finland Growth index gained 20.58%, and the MSCI Finland Small Cap 49.37% over the same period.
However, all three indices have trailed the MSCI World index, which returned 51.73% over the period, according to data from FE.
Looking to offshore mutual funds that are domiciled in Finland and 50% or more exposed to Finnish assets, the FE data points to seven funds. Their performance is outlined below (ranked by 36-month performance):
|Evli Finnish Small Cap B in EU||2.16||5.09||11.94||29.56||63.18||122.02|
|Danske Inv Finnish Institutional Equity D TR in EU||1.93||1.30||4.50||16.19||43.10||86.82||61.77|
|Danske Inv Finland High Dividend G in EU||1.84||2.75||6.58||18.76||37.22||73.89||48.96|
|Danske Inv Finnish Equity D TR in EU||1.83||1.21||4.21||15.28||37.10||74.42||39.75|
|FIM Fenno in EU||2.01||1.28||1.89||11.13||31.28||81.18||34.54|
|Evli Euro Liquidity B EUR in EU||-0.01||0.12||0.28||0.88||2.48||5.11|
|FIM Likvidi Cap in EU||0.00||0.02||0.06||0.16||0.50||1.18||13.07|
Compared to the indices noted above, few of the funds have outperformed the World index, while roughly half have underperformed the MSCI Finland index.
The significantly altered outlook by Finnish consumers could, however, indicate that the underlying holdings may be able to provide stronger returns going forward, which in turn should be reflected in the performance of the portfolios.
A key factor affecting confidence levels is unemployment. Statistics Finland noted that the latest, March figures, represent a clear turnaround on the situation a year ago: “Altogether 43% of consumers thought in March that unemployment would decrease over the next 12 months, while 18% of them believed it would increase. In February the respective proportions were 39% and 21% and twelve months ago gloomy at 21% and 42%.”
Turn on TV news market reports, flick to the financial commentary in the business pages, and more often than not those holding forth their views of the sector will be male.
Sometimes referred to as the ‘biggest manager you have never heard of’, Jonathan Boyd has caught up with PGIM for insight into its Europe region developments as part of global expansion