MNI INTERVIEW: Swedish Funds Raise Krona Equity Holdings

Swedish funds have moved away from U.S. assets and invested more heavily in Swedish equities this year, following a period during which dollar weakness against the krona limited their returns, an economist at the Swedish Investment Fund Association told MNI.

"If you're looking at January, February, 2026, it's a large net inflow into Sweden," Fredrik Hard said, as net flows into Swedish equity funds were SEK8 billion in January and SEK13 billion in February, after totalling less than SEK1.7 billion over the whole of 2025. In the first two months of 2026, net SEK16.6 billion in U.S. equities were sold.

"It could be a reaction of the krona appreciation last year," with the currency unchanged against the dollar from levels at the start of 2026. (See MNI INTERVIEW: Not Clear Krona Undervalued - Riksbank Head).

A previous move away from Swedish-managed pure U.S. equity funds into global funds has also continued, as "more and more retail investors became aware of the huge exposure to U.S. equities within the global equity fund category," Hard said in an interview.

AMERICAN ASSETS

The data for 2025 show a "huge increase in net sales of global funds" totalling over SEK160 billion, with SEK57 billion in U.S. sales in the same period. Hard said investors realised that if you invested in global funds "there is really no need to also have U.S. equity diversification, and it could be quite the opposite," he said. 

The decline in the dollar crushed the gains in U.S. equities for Swedish funds in 2025. This year funds are flowing directly into Swedish equities.

American equities had brought Swedish investors "extraordinary [returns] for quite some time," thanks largely to the appreciation of the U.S. dollar. 

"That trend was broken, to say the least, last year," when the krona began to appreciate, leaving "a weaker return for Swedish investors exposed to U.S. equity funds."

ASSET TYPES

Still, there is no evidence of broad outflows from Swedish equity funds. "There is not a large inflow, but anyhow an inflow into equity funds," of SEK2.7 billion in the past two months. In February, total equity net assets totalled SEK6.16 trillion. 

"It is a small inflow, but it's a fairly large shift between different fund types," although both bond funds and equity funds have had net inflows this year.

The Swedish Investment Fund Association publishes its data "around the tenth of each month."