Younger Norwegians increase regular investments

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The number of Norwegians aged 25-39 increased their regular savings into equity and balanced funds by some 11% over the past year, according to the results of the latest annual research into regular savings contracts – Spareavtaleundersøkelsen – published by VFF, the Norwegian Fund and Asset Management Association.

The research has been conducted annually since 2006, and involves looking at trends in the sector of the market for funds based on contracts signed with providers, such as banks, which offer regular services to facilitate regular investments into funds by retail investors.

This year’s data suggests that Norwegians on average save NOK791 (€89.4) per month via such contracts, up from NOK758 the previous year. In total, these savings contracts see NOK580m (€65.5m) in regular savings invested per month into equity or balanced funds, or nearly NOK7bn (€791m) annually, the Association said.

The number of contracts has increased by 74,000 to 733,100 over the past year, equivalent to an increase of 11%, while at the same time the average sum saved has increased by 4%.

However, while the data suggests that most of these contracts are owned by those in the 40-59 age bracket, accounting for nearly half of all contracts, the most active age bracket seen has been in the 25-39 age bracket, where the number of contracts in force increased by some 18%.

“The advantage for this group is that they have a longer time horizon than those who are older, and can take bigger risks,” said Lasse Ruud, CEO of the Association.

“Therefore they can benefit from compound interest. Every year the return made can be added to the investments made. Interest is made both on the savings added and on the interest received in previous years. Over time this means that the savings grow faster every year that goes.”

According to the data, it is still Norwegian men that invest most through these savings contracts. Between 2006-14 men entered 107,000 new contracts, but women just 54,400. And while men have increased their average sum saved monthly by 33% or some NOK217 over the period, women have increased theirs by a lower 20% or some NOK112. Today, men account for some 64% of the total saved through the contracts.

Ruud adds that these savings contracts provide additional benefits to investors, because they spread the investment risk over time, versus making one-off investments into funds, particularly equity funds.

Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

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