The Swedish ISK (Investeringssparkonto) investment savings account regime is becoming an increasingly important route to fund distribution, according to net investment returns analysed by the country’s largest online stock broker.
Avanza has estimated that up to 2 million Swedes are now using an ISK account to improve returns from assets such as funds and direct equity holdings, which can be switched within the ISK wrapper withough having to pay tax or declare the switches in the same way as for assets held elsewhere.
The figure of ISK users is estimated off a survey done by Sifo on its behalf, which sampled some 1,000 adults, reports local business daily Dagens Industri.
Most importantly, Avanza said on its own website that it estimates returns are 28% higher for those using the ISK rather than a standard account for investing in funds.
It estimates that for the averge investor saving via Sweden equity funds at a rate of SEK500 (€54) per month, since the ISK regime was launched four years ago, the difference would be SEK6,280 versus SEK4,890 for the non-ISK investor (€677 versus €527).
“That is a difference of 28%. And we are just talking about four years. Because we often save over many more years, the difference will be dramatically bigger in coming years,” Avanza stated.
The importance of the ISK regime was reiterated at a recent briefing held by the Swedish Investment Fund Association, led by chief executive Fredrik Nordström, at which he outlined the key priorities of the group for the coming year.
Data to the end of September 2015 from the Association suggests that some SEK45.4bn (€4.89) was saved on a net basis into all types of funds (equity, fixed income, balanced, hedge and others) through the first three quarters of the year, taking total ISK fund assets to SEK185.65bn (€20.12bn).