The first 10 months of 2019 have seen Danish investors in local investment funds put some DKK7.6bn (€1bn) towards foreign bonds on a net basis, amid a shift in attitude towards riskier assets, according to data published by the Danish Investment Association, which is part of Finance Denmark alongside seperate memberships for mortgage lenders and securities dealers.
Birgitte Søgaard Holm, director of Investments & Savings at Finans Denmark said: "In light of a pending trade war and concerns about Brexit, Danish investors have generally adjusted the risk profile of their investments."
"Over the first 10 months of the year the trend has been to sell equity funds and buy bond funds. Apart from investors also buying Danish bonds, the biggest interest has been in foreign bond funds, among other things, because there are more investment opportunities in global rates markets too choose from than in a pure Danish context."
"And despite bond returns generally falling, it has also been quite sensible to seek out foreign bonds. In 2019 returns for foreign bond funds are around 5-10%. Over the past 10 years an investment in a fund with foreign bonds has averaged annual returns of 4.5%."
Across the spectrum of bond funds, it has been non investment grade bonds that has been most popular. However, Danish investors seem to have turned their backs towards emerging market debt, in the same way they have turned away from emerging market equity, the Association's data suggests.
(Source: Danish Investment Association)