In mutual funds, which are primarily targeted at private investors, assets increased in 2016 by DKK 67 billion to a total of DKK 873 billion, while assets in capital associations increased by DKK 48 billion to DKK 1,171 billion.
In recent years, investors have taken greater risks in their investments. These have taken the form of larger equity holdings and of shifts within the individual asset classes in favour of traditionally riskier assets. This development should be seen in light of the low interest rates in recent years.
Very small amounts in passively managed funds
Less than 5 per cent of Danes’ savings in investment funds are in passively managed funds. This is a very small proportion compared with other countries. Globally, the proportion is 22 per cent.
Danish investors also invest mainly in Danish funds, a further difference from other countries.
Both of these things raise the question whether Danish investors have put together the optimum mix of investment funds.
Survey of liquidity risk management
The FSA conducted a survey of Danish investment management companies and their risk management of liquidity in their mutual funds (UCITS). Among other things the survey showed that the mutual funds managed by the respondents only had experienced redemption pressure that could be handled without major adjustments.
This may be because large redemptions are typically made by large institutional investors, and investment management companies have a close dialogue with investors to ensure that their sub-funds do not suddenly face major unforeseen redemptions.
Read Market developments in 2016 in collective investments here.