Amid the aftermath of the US presidential election, fund investors at Avanza Bank are making strategic moves towards American investments. According to a recent press release, nine out of ten fund purchases in November have been within the categories of global funds, North American funds, and technology funds.
Felicia Schön, a private economist at Avanza, explains the rationale behind this shift, citing the increasing return differential between American and Swedish indices. She notes that the uncertainty surrounding the election results and their global implications is prompting fund investors to further increase their exposure to the US market, despite its relatively high valuation at the moment.
Interestingly, small-cap funds and Sweden-focused funds are not as popular among investors, with most of them leaning towards selling these assets. Schön highlights that apart from balanced funds, Swedish exposure is being largely avoided by fund investors at Avanza.
On the other hand, at Nordnet, fund investors are also eyeing opportunities in the US market post-election. New statistics reveal that six out of ten of the most net-purchased funds in November have significant US exposure.
Frida Bratt, a personal finance expert at Nordnet, sheds light on the trend, pointing out that global funds now consist of up to 75% US investments, which explains their strong performance post-election. However, investors at Nordnet are steering clear of funds with exposure to the real estate sector.
Bratt explains that real estate funds have seen a decline since President Trump’s victory, as there are concerns that his policies could drive up interest rates. This is particularly worrying for the debt-laden real estate sector, leading to a sell-off in real estate funds. Corporate bond funds, which heavily feature real estate companies, are also being offloaded by investors.
The divergence in investment preferences between Avanza Bank and Nordnet is clear when looking at the most bought and sold funds at each platform in November. At Avanza, global funds, North American funds, and technology funds reign supreme, while small-cap funds and Sweden-focused funds are being shunned. Conversely, at Nordnet, funds like Länsförsäkringar Global Index and Spiltan Aktiefond Investmentbolag are among the top buys, while real estate-focused funds like Lannebo Fastighetsfond are being sold off.
In conclusion, the post-election investment landscape for fund investors in Sweden is heavily influenced by the perceived opportunities and risks emanating from the US market. While the US continues to attract investor interest due to its potential for growth, sectors like real estate face headwinds that are prompting a shift in investment strategies. As fund investors navigate these uncertainties, their choices reflect a strategic repositioning to capitalize on emerging trends in the global economy.