Yearly report:
Fund saving 2011
[2012-01-11] The annual report from the Swedish Investment Fund Association shows that new savings in funds in 2011 ended on plus, thanks to provisions to the premium pension in December. The financial turmoil characterized virtually the entire 2011 and influenced the net savings in funds. Equity funds had large net outflows, while above all money market funds and balanced funds showed net inflows.
The total fund assets at the end of 2011 amounted to SEK 1819 billion. This represents a reduction of assets by SEK 145 billion this year, explained by the weak stock market.
In December, SEK 23.7 billion kronor were invested in funds, which resulted in a net savings totaling SEK 16 billion for the full year. The large inflow in December was due to the annual provisions to the premium pension, which was the equivalent of SEK 30 billion. Excluding this net savings in investment funds was negative in December and for the year as a whole.
The bulk of the premium provisions was invested in equity funds, which nevertheless showed a net outflow for the year at SEK 53.5 billion. Instead fund investors chose money market funds and balanced funds in 2011. These types of funds recorded net inflows of 35.5 and 29.2 billion in 2011. Bond funds recorded net inflows as well, SEK 4.3 billion.
"2011 was an eventful year in which the euro crisis and debt problems in Europe contributed to a dismal performance on the stock exchange. Although turbulence is not yet over, it may be appropriate to point out that stocks and equity funds is about long-term investments. We will also remember 2011 for the pursuit of democracy in North Africa and the Middle East, which could provide new emerging markets and poverty reduction in these regions", said Pia Nilsson, CEO of the Swedish Investment Fund Association.
"Yes, fund saving is affected by what is happening around the world. Risk diversification is important to consider and is something which fund investors can get by investing in different types of funds. Regular savings also provide diversification in time."
Net sales 2011, SEK billion
The total net sales in funds of SEK 16 billion in 2011 is, compared to previous years, very low. Apart from the crisis year of 2008 the net inflow in 2011 is actually the lowest since 1996. Excluding also the premium pension provisions, 2011 is the second worst year in terms of new savings, since the statistics began to be compiled in 1994.
Net sales 1994-2011, SEK billion[1]
Financial concerns influenced
savings behavior in 2011
Both financial and political turmoil characterized the 2011 and developments in the world’s equity markets were very volatile. The value of the Stockholm Stock Exchange, including dividends, fell by nearly 14 percent.
This contributed to the very weak net savings in equity funds with a net outflow of SEK 53.5 billion in 2011. Virtually all fund categories recorded net outflows. The highest net outflows came from Sweden funds and Eastern European Funds, 22.5 and 12.1 billion respectively. Funds that invest both in Sweden and globally also showed large outflows during the year.
Only Global Funds, North America funds and Japan funds showed net inflows in 2011. For global funds the net inflows was entirely due to the premium pension provisions in December, while the North American funds had net inflows during most of 2011.
Despite the large outflows from equity funds during the year, passively managed funds (index funds) showed a net inflow in 2011 of 5.5 billion.
Source: SIFA and Morningstar
As shown in the chart below, there is a correlation between the performance of the stock exchange and net sales of equity funds (excluding premium pension saving in December).
Net sales of funds and the performance of the Stockholm stock exchange, 2011
Source: SIFA and SIX-Telekurs
As mentioned above, the performance of the stock markets were poor in 2011. Equity funds, on average, went down by 13 per cent, and balanced funds went down by 5 per cent. On the contrary, bond and money market funds increased in value by 8 and 2 per cent respectively.
Source: Morningstar fund index
Almost every equity fund category showed negative performance in 2011. Only a few sector funds, such as pharmaceuticals and biotech, and Indonesia funds were able to perform. Worth noticing is that broader investment orientations such as global and North America funds showed performance above mean. Especially North America funds had good performance and is actually one of the few categories with a net inflow in 2011.
Source: Morningstar fund index
Total net assets 2011
Total net assets amounted to SEK 1 819 billion, of which SEK 949 billion (52 per cent) were invested in equity funds. At the beginning of the year net assets was SEK 1 964 billion, which means that net assets in 2011 have decreased by SEK 145 billion due to negative performance. Equity funds also showed decreasing net assets, due to (80 %) negative performance, but also due to redemptions.
For comments please contact:
Pia Nilsson, CEO, the Swedish Investment Fund Association
08-506 988 01 / 0709-50 38 60
pia.nilsson@fondbolagen.se
Fredrik Pettersson, the Swedish Investment Fund Association
08-506 988 03 / 0733-12 55 77
fredrik.pettersson@fondbolagen.se
Members of the Swedish Investment Fund Association:
Aktie-Ansvar, Alfred Berg Fonder, AMF Fonder, Avanza Fonder, Aviva Investors, Capinordic Asset Management, Carnegie Fonder, Catella Fonder, Danske Invest, Didner & Gerge Fonder, DNB Fonder, East Capital Asset Management, Enter Fonder, Evli Fonder, Fidelity Worldwide Investment, FIM Fonder, First State Investments, Folksam LO Fond, Franklin Templeton Investments, Handelsbanken Fonder, Holberg Fondene, JP Morgan Asset Management, Lannebo Fonder, Länsförsäkringar Fondförvaltning, Movestic Kapitalförvaltning, Nordea Fonder, Nordea Investment Funds, Odin Fonder, SEB Fonder, Simplicity, Skagen Fonder, Skandia Fonder, Solidar SICAV, SPP Fonder, Swedbank Robur Fonder, Svenska Lärarfonder, Ålandsbanken Fonder, Öhman Fonder.
[1] From 2006, annual contributions to premium pensions are also included for fund companies who are not members of the Swedish Investment Fund Association.
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