Norwegian funds record high equity fund savings despite 2020 market turbulence
While 2020 started off with net subscriptions of NOK 15.6bn in January, it was quickly reversed in March, as markets world over fell sharply, resulting in investors selling NOK 63bn. However, as the market picked up over the following months, new net subscription figures rose every month. “Despite falling share prices and great uncertainty about the consequences of the Coronavirus pandemic during the spring, we ended the fund year well in the positive,” said Bernt S. Zakariassen, CEO of the Norwegian Association of Securities Funds (VFF).
Retain investors net subscriptions in mutual funds stood at NOK 17bn in 2020, with a record high of NOK 16.8bn in equity funds. According to Zakariassen, the high subscription in equity funds is probably partly an expression of the fact that many Norwegians have spent less money on travel and other consumption in 2020 and have therefore been able to save more. “At the same time, many have probably seen the benefits of saving long-term in funds as an alternative to bank savings,” he added.
These private investors’ total assets in mutual funds stood at NOK 285bn, an increase of NOK 8.6bn from 2019. Additionally, net pension funds with fund choices were subscribed for NOK 22bn in 2020. At the end of the year, Norwegian retail investors had invested NOK 264bn in such schemes.
Institutional investors’ net subscriptions for mutual funds stood at NOK 7.9bn in 2020, with outflows of NOK 20bn from equity and combination funds. Meanwhile, fixed income funds were subscribed for about NOK 30bn. Foreign investors bought Norwegian mutual funds for NOK 7bn last year.
Norwegian funds’ total assets recorded an increase of NOK 166bn in 2020, with NOK 44.5bn was net inflows into new funds while NOK 121bn was a return for fund customers.