The Swedish Investment Fund Association (Fondbolagens förening) has published responses from four local portfolio managers on their views of the year gone past, their advice for investors in 2018, and how they themselves invest and save for the long term.
Maria Wärn, manager Länsförsäkringar Småbolag Sverige (smaller companies Sweden) fund
Q. What marked out 2017 from your management perspective?
A. There are three things above all that i think of. The first is the continued high IPO activity in the market, with some slightly receding interest from investors towards the end of the year. The second is concern over residential property price developments, which also affected consumption related equities. The third is the growing ecommerce company sector and clear signals that the shift to ecommerce has speeded up for real.
Q. What advice would you give investors for 2018?
A. Ensure the risk level in the portfolio matches the investment horizon. With a slightly longer investment horizon I would not be without Swedish equities in my portfolio, particularly Swedish smaller companies that over time have shown very strong profit growth.
Q. How do you save yourself?
A. I save mostly in actively managed funds through ISK [the Swedish Investment Savings Account regime], kapitalförsäkring [endowment insurance] and PPM [the Premium Pension system]. The funds we manage in our Swedish equity team are of course in the portfolio.
Pär Nürnberg, chief executive Xact fonder
Q. What marked out 2017 from your management perspective?
A. The large net flows to index funds in the Swedish fund market.
Q. What advice would you give investors for 2018?
A. Simplify your investments! Simple and cost-effective fund savings solutions with good support for decisionmaking are being launched on a broad front. Test and challenge your current savings!
Q. How do you save yourself?
A. Primarily in simple generationsfonder [balanced funds that shift from equities to fixed income as retirement nears] that consist of a well weighted mix of index funds.
Niklas Edman, manager Carnegie Corporate Bond och Carnegie High Yield Select
Q. What marked out 2017 from your management perspective?
A. Yet another extreme year with growing risk appetite, but also a year with a series of interesting “new” companies that are turning to the credit market, where we as investors can also reach companies that are not listed. An example is Akademibokhandeln [a chain of bookshops] and another is Klarna [a bank providing online payment services], two interesting companies that all consumers have a relationship with, but that are somewhat tricky to invest in. A key event for the Nordic credit market was Intrum Justitias’ issue of €3bn, the biggest in Swedish history. An even more positive key development is that interest in green bonds is growing in leaps and bounds. Globally viewed, the number of green bonds grew by over 60% to the equivalent of nearly $160bn, just in 2017.
Q. What advice would you give investors for 2018?
A. Do as you normally would! Don’t try to time the market, don’t try to be smart, and don’t do anything dumb. Invest long term in companies that act long term.
Q. How do you save yourself?
A. I have a mix of fixed income and equities, local and global, but given a long investment horizon I have a large portion in Carnegie High Yield Select.
Maria Qundos, manager Nordea Stratega 10 och 30
Q. What marked out 2017 from your management perspective?
A. Good returns to our shareholders! That is of course the most important. Synchronised global growth and rising corporate profits supported the world’s exchanges, which of course benefitted equities investments. And despite a challenging environment in fixed income markets, our actively managed balanced/allocation funds showed good positive development. in my team we see continued interest in these actively managed solutions, and we see also increasing interest from Swedish investors in our funds focused on absolute return.
Q. What advice would you give investors for 2018?
A. As always, it is important to look over the total portfolio’s risk level. How much equity, fixed income and alternative investments are optimal in mind of the horizon and the preferred level of risk?
Q. How do you save yourself?
A. Balanced compote of funds and a few directly owned equities. The biggest single investment is, however, as for many others in Stockholm the family residence.
