The exchange traded fund industry may be growing rapidly, but many Nordic pension funds are yet to find a use for ETFs in their investment portfolios.
The SKr6.2bn (€722m) Volvo Car Corporation pension fund in Sweden has a large proportion of its equity exposure in exchange traded funds and aims to add fixed income ETFs to its portfolio.
Nordic investors generally prefer derivatives for tactical allocations but some argue there is also room for ETFs
Investors are demonstrating cautious optimism, but a ‘no change’ verdict on equities signals a softening of sentiment
When PKA split its high yield portfolio into regional exposures, it had to decide whether its US and Europe-based managers would retain the emerging market corporate debt exposure
The outlook for emerging market corporate debt remains positive but not all Nordic investors are convinced
Good returns are prompting investors to reconsider risk, resulting in a growing appetite for emerging market equities
Low yields are forcing a shift away from fixed income in favour of bank loans, hedge funds, real assets and emerging market equities
Nordic investors’ interest in high yield has cooled down as they are turning to euro-zone equities and corporate bonds
Ease of access afforded by recent product development means investing outside domestic borders warrants serious attention from investors