Mutual funds, quarterly figures, Q3 2009

This is the third consecutive quarter where foreign investors net purchased mutual fund shares. Foreign investors net purchased mutual fund shares for NOK 0.3 and NOK 2.3 billion in the year’s first and second quarter followed by NOK 5.7 billion in the third quarter. Nearly all of the investments were made in equity funds. After a modest net sale of mutual fund shares during the turbulent second and third quarter of 2008, it now seems that foreign investors again have started to invest.

Continued increase in mutual fund share capital

The value of total mutual fund capital increased by NOK 41 billion, or approximately 11 per cent, to a total of NOK 407.3 billion. This increase is caused by the high net purchases of shares and increases in the values of securities. The rise in value of total mutual fund shares in the third quarter was however somewhat smaller than the increase in value in the second quarter where the value of the mutual fund shares increased by 17 per cent. Equity funds increased the most during the third quarter. The total value of mutual fund shares in this type of fund was equal to NOK 214.7 billion at the end of the third quarter, up from NOK 182.5 billion in the second quarter. The value of mutual fund shares issued by money market funds and bond funds increased marginally to NOK 113.4 and 66.6 billion. Most of these increases were caused by net purchases of mutual fund shares.

Highest net purchases since 2007

Total net purchases of mutual fund shares amounted to NOK 15.7 billion in the third quarter. NOK 11 billion of these were invested in equity funds. Net purchases have not been this high since the fourth quarter of 2007. High net purchases of mutual fund shares contributed together with the strong increase in the values of securities to the strong growth in value of the mutual fund shares.

Households and life insurance companies invest more

In the third quarter of 2009, the household sector net purchased mutual fund shares for a total of NOK 2.1 billion in all types of mutual funds. This was the third consecutive quarter in which the households net purchased shares in all types of funds and the fifth in which they net purchased shares in equity funds. Households invested NOK 1.4 billion in mutual fund shares in the third quarter of 2009.

Life insurance companies net purchased for a total of NOK 3.3 billion in all mutual funds in the third quarter of 2009, of which NOK 2.5 billion was invested in equity funds. After net selling mutual fund shares in the fourth quarter of 2008, the life insurance companies have now net purchased mutual fund shares in three consecutive quarters.

Losses from fluctuations in currencies

The NOK strengthened considerably against the US dollar, Euro and the British pound during the quarter. These exchange rate fluctuations resulted in losses for the funds that invest in international markets. The large increases in values of assets at the world’s stock exchanges, however, contributed to a solid growth in values by a good margin.

Life insurance companies are still the largest owners

Life insurance companies are still the largest owners in mutual funds, with a share of 28.5 per cent. Foreign investors increased their owner share by 1.4 per cent, to a total of 11.9 per cent during the third quarter. The household sector’s owner share was marginally reduced to 25 per cent during the quarter.