Mutual funds, quarterly figures, Q1 2010

From the end of the fourth quarter of 2009 to the end of the first quarter of 2010, the total value of mutual fund shares increased by NOK 24 billion, or 5.3 per cent, to NOK 472.7 billion. The value of the Norwegian registered mutual funds is now 3.6 per cent higher than at the previously highest level in the fourth quarter of 2007.

The increase in the value of mutual funds from the previous quarter is due to net purchases of NOK 12 billion and rising values of the funds’ portfolios. This is also the fifth quarter in a row that net purchases of mutual fund shares were higher than net sales.

From equity funds to bond and money market funds

The total net purchases in equity funds decreased significantly in comparison to the three previous quarters and ended at NOK 3.8 billion. In comparison, net purchases of shares in equity funds amounted to NOK 18.9 billion in shares in the fourth quarter of 2010. Of the total net purchases in all types of funds of NOK 12 billion in the first quarter of 2010, a whole NOK 8 billion was placed in bond and money market funds. Investing in bond and money market funds is associated with lower risk than investing in equity funds.

Life insurance companies invest in bond funds

Companies in the life insurance sector invested a total of NOK 3.4 billion in mutual funds, of which NOK 2.4 billion was invested in bond funds. This is in contrast to the development in the previous two quarters where life insurance companies made most of their investments in equity funds. This change in investment strategy could indicate that the life insurance companies have wanted to reduce the risk that they are exposed to.

Households continue to invest

The statistics Securities registered with the Norwegian Central Securities Depository showed that the households´ appetite for investing in equity during the first quarter of 2010 was decreasing. Mutual fund statistics in the first quarter of 2010, however, show that households have continued to invest in mutual fund shares. This sector net purchased shares of NOK 2.5 billion in the first quarter of 2010. However, as is the case for life insurance companies, households have also shifted their investments towards bond funds. Of the total net purchases, NOK 1.1 billion was placed in bond funds and NOK 0.6 billion in equity funds.

Foreign investors continued to invest in mutual funds during the first quarter of this year. Net purchases by foreign investors ended at NOK 1.9 billion in the first quarter of 2010. Nearly all of this was placed in equity funds. Foreign investors’ total net purchases were, however, four times higher in the previous quarter.

Life insurance companies still the largest owner

At the end of the first quarter of 2010, life insurance companies were still the largest owner sector in mutual funds, with an owner share of 27.9 per cent. Households have, however, had their owner share increased significantly due to adjustments made in the statistics. This sector now has an owner share of 27.4 per cent. Foreign investors´ owner share increased to NOK 14.2 billion at the end of the first quarter of 2010.