Swedish fund inflows positive through August; industry awaits new PPM rules

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Amid the fallout from Sweden’s most uncertain election in decades, the Swedish Investment Fund Association has posted flow data for August which point to continued confidence in collective investments, as some SEK4.5bn (€429m) of net inflows went to the industry, which along with market movements took total industry assets up by some SEK130bn (€12.4bn) to a new record high of SEK4.434trn (€423.4bn).

Of the net inflows, the majority were accounted for by equity funds, which attracted SEK3bn. Balanced funds attracted SEK2.4bn, and long term fixed income funds SEK2.5bn. Net outflows were seen in short term fixed income funds, SEK-2bn, and hedge funds, SEK-1.4bn.

Net inflows to the industry so far in 2018 have hit SEK42bn (€4bn), with the largest share, SEK14.6bn (€1.4bn) going to balanced funds.

Gustav Sjöholm, financial savings economist at the Swedish Investment Fund Association, said one key reason for the strong market returns to local fund  investors through August was the rising dollar. The value of the Stockholm Stock Exchange was up 2.6%, including dividends over the month.

By sector the biggest net inflows were seen in North America and global funds, with outflows seen from emerging market and European funds. Equity funds accounted for some 60% of total industry assets at month’s end.

PPM rules

Also flagged up recently by the Association are the new rules expected to impact the industry following the Swedish Parliament’s decision on 1 May to introduce new requirements for funds listed on the PPM platform.

The platform plays a key role in self-selection by every employee in the country, for whom a percentage of pension savings required by law can be put towards funds other than the default fund, AP7.

The Swedish Pensions Agency, which has a statutory responsibility to run the PPM platform, has said its work on developing a new set of rules governing distribution agreements with fund providers whose funds are available on the platform, should be completed by 1 October this year.

The Association has invited Erik Fransson, head of the Fund Market Department at the Pensions Agency, to outline the new agreements and how applications to list funds on it will work in future. He is scheduled to present on 13 September to members of the Association.