2013 a very strong year for investment funds

[2014-01-16] Large inflows in December contributed to SEK 105 billion in total net savings in funds in 2013. This represents the second highest annual net inflow since statistics began to be compiled. Balanced funds, followed by equity funds and money market funds recorded the largest net sales. The total fund assets at the end of 2013 amounted to record high 2,481 billion, an increase over the year with over 430 billion. This, among other things, appears in the Swedish Investment Fund Association’s annual report on fund saving in Sweden.

“2013 was a fantastic fund year. The total fund assets have increased by more than SEK 430 billion, of which over 100 billion is new savings and more than 300 billion is capital appreciation", says Pia Nilsson, CEO of the Swedish Investment Fund Association.

"It is interesting that in addition to Sweden funds, also European funds and funds with investments in the United States developed very well. It is also very pleasing to note that Japan funds finally shown strength and gave investors a very good return in 2013. In terms of new savings, the largest inflows were recorded for balanced funds, which clearly show that fund savers desired risk diversification in their savings during the year.”

2013 in brief:

  • 2013 was a strong year for investment funds. Net savings, deposits minus withdrawals, was positive all months during the year. In total, the net sales amounted to SEK 105 billion.
  • The total fund assets in Sweden increased during 2013, with SEK 432 billion and amounted at the end of the year to record high 2 481 billion.
  • Most equity markets showed large increases in value during 2013. On average investment funds rose 17 percent and Sweden funds recorded an average value growth of 27 percent. Also European funds, global funds and North America funds saw large increases in value during the year (22-33%). For emerging markets, however, the stock market developments were considerably weaker.
  • Investment funds recorded total net sales of SEK 43 billion in 2013. The new savings reflected in high degree the performance of the various stock markets. Funds that invest in traditional markets, which exhibited the highest yield in 2013, were also the types of funds with the largest net inflows during the year. On the contrary, net withdrawals were made from emerging market funds, mainly from Eastern European funds. Also the category Sweden & Global, which consists mainly of the old national savings (“Allemansfonderna”), recorded continued net outflows in 2013.
  • Index funds accounted at the end of 2013 for about 11 percent of total assets in equity funds. During the year, index funds recorded a net inflow of over SEK 12 billion, equivalent to almost 30 percent of total new savings in equity funds.
  • Balanced funds had large net deposits throughout the year, and recorded a total net inflow of SEK 56 billion.
  • Also money market funds had net inflows during 2013, with a total of SEK 16 billion.
  • In contrast, bond funds recorded a net outflow seen over the full year of SEK 8 billion.
Fredrik Pettersson and Fredrik Hård present the statistics


Yearly Report: Fund Saving 2013

December inflows lifted an already strong full-year

In December net sales of investment funds amounted to SEK 39 billion, of which about SEK 34 billion represented the annual allocations to the premium pension. Equity funds recorded a net inflow of SEK 23 billion and balanced funds had net inflows of SEK 12 billion. Also money market funds and bond funds recorded net deposits of SEK 2.9 respectively SEK 1.6 billion.

Excluding the premium pension provision, net sales in December amounted to a total of SEK 5.7 billion. Balanced funds and money market funds accounted for SEK 2.9 and 2.5 billion. Also bond funds and hedge funds had net inflows of SEK 0.5 and 0.4 billion. Equity funds, on the other hand, recorded, net withdrawals of SEK 0.7 billion (with the premium pension excluded).

 

Full year 2013

The net deposits in December led to a total net sale of investment funds in 2013 of SEK 105 billion. Balanced funds had net deposits of SEK 56 billion and equity funds had net deposits of SEK 43 billion. Also money market funds recorded a net inflow of almost SEK 16 billion. Bond funds and hedge funds recorded, on the other hand, net withdrawals of SEK 7.6 and 0.9 billion during 2013.

Net sales in investment funds 2013, SEK billion

 

The total net inflow into investment funds of SEK 105 billion in 2013 constitutes the second largest net inflow ever, and has only been exceeded in 2009 when total net sales amounted to SEK 135 billion.

Net sales in investment funds 1994-2013, SEK billion

 

Continued financial turmoil but stock market appreciations in 2013

Despite the fact that also 2013 were influenced by both financial and political turmoil, significant improvements appeared during the year on many places around the world. The development of most of the world's equity markets was very good. The value on the Stockholm Stock Exchange, including dividends, rose in 2013 by nearly 28 percent. In general, the developments of traditional equity markets in 2013 were very strong, while many emerging markets, however, exhibited a significantly weaker performance.

The market development in 2013 affected the interest in equity funds during the year. Total net sales of equity funds amounted to SEK 43 billion of which global funds recorded net deposits of SEK 29 billion. Also Sweden funds and funds investing in North America and Europe recorded large net inflows during the year. In contrast, net withdrawals were made from emerging market funds, mainly from Eastern European funds. Also the category Sweden & Global recorded net outflows during most months in 2013. The large inflow in global funds is partly due to the fact that SEK 15 billion was invested via the premium pension. But even if these savings are excluded the net inflow were large, SEK 14 billion.

 

Source: SIFA and Morningstar fund index

Worth noting is that index funds recorded a net inflow in 2013 of over SEK 12 billion. This represents almost 30 percent of total net savings in equity funds during the year, compared with the index funds' share of total assets in equity funds, which amounts to 11 percent.

Net sales in equity funds followed the stock market development

The graph below shows the positive relationship between the monthly development of the Stockholm Stock Exchange and the net savings in equity funds (excluding savings through premium pension). During the two months (June and August) as the Stockholm Stock Exchange fell, equity funds recorded net withdrawals. Furthermore, the largest net deposits in equity funds were made during the month with the strongest stock market development.

Net sales in equity funds and the development of the Stockholm stock exchange 2013


Source: SIFA and SIX-Telekurs

 

Fund returns in 2013

In 2013, as mentioned above, the developments in global equity markets were positive. On average, the value of equity funds rose with almost 17 percent, and balanced funds rose on average with 9 percent in value.

For bond funds and money market funds, the average return was 1 percent respectively. The spread in return between different types of bond funds was relatively large. Corporate bond funds showed returns of up to 8 percent, while many other bond funds had negative returns during the year.

 

Source: Morningstar fund index

Equity funds that invest in traditional equity markets performed strongly in 2013. U.S. funds rose with an average of 33 percent and also Sweden funds, Nordic funds and European funds showed average yields of up to 30 percent.

The highest returns during the year had equity funds investing in biotech, these increased on average by 59 percent during the year. Funds investing on emerging markets, however, developed significantly weaker in 2013. On average, emerging market funds increased in value with less than 1 percent, and funds that invest in Eastern Europe and Latin America actually decreased in value. It is also noteworthy that last year's winning category, Turkey Funds, in 2013 belonged to the fund categories with the worst development, minus 28 percent, due to the growing political disturbance in the country.

 

Source: Morningstar fund index

Net Assets 2013

The total net assets of investment funds in Sweden amounted at the end of 2013 to SEK 2 481 billion, which represents the highest AuM figure ever recorded. At the beginning of the year the fund assets totaled SEK 2 049 billion, representing an increase in value of SEK 432 billion during 2013. The asset growth was to one quarter comprised by and net inflows and to three quarters by positive value development. Of the total fund assets SEK 1 377 billion (equivalent to 55 percent) are invested in equity funds.

 

For further comments please contact:

 Pia Nilsson, CEO, the Swedish Investment Fund Association
+46 (0)8 506 988 01, pia.nilsson@fondbolagen.se

Fredrik Pettersson, Chief Analyst
+46 (0)8 506 988 03, fredrik.pettersson@fondbolagen.se

Members of the Swedish Investment Fund Association:
Aktie-Ansvar, Alfred Berg Fonder, AMF Fonder, Avanza Fonder, Aviva Investors, Baring Asset Management, Carnegie Fonder, Catella Fonder, Danske Invest, Didner & Gerge Fonder, DNB Asset Management, East Capital, Enter Fonder, Fidelity Worldwide Investment, FIM Fonder, First State Investments, Franklin Templeton Investments, Handelsbanken Fonder, Holberg Fonder, J.P. Morgan Asset Management, Lannebo Fonder, Länsförsäkringar Fondförvaltning, M&G International Investments, Max Matthiessen Värdepapper, Monyx Financial Group, Movestic Kapitalförvaltning, Naventi Kapitalförvaltning, Nordea Fonder, Odin Fonder, SEB Investment Management, Simplicity, Skagen Fonder, Skandia Fonder, Solidar Fonder, SPP Fonder, Swedbank Robur Fonder, Tundra Fonder, Öhman Fonder.

Associate members
Bloomberg, Citi, Deloitte, Gernandt & Danielsson Advokatbyrå, Hökerberg & Söderqvist Advokatbyrå, KPMG, MFEX, Morningstar, PwC, SEB Fund Services.

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