Saving is very important, and it makes up for the money that you will require after retirement, including medical benefits. The Swedes are really particular in it, and people start saving here from the age of 10! Hence, the awareness is very high here, which is lacking in other countries. Many things can be learnt from the Swedes when it comes to fund saving. Here are a few facts about them.
The Swedes save keeping in mind the requirements of post retirement. Thus, they invest heavily in pension funds. Among the premium pension funds that they are saving in, what they look for is the return. People start saving in pension funds from the age of 10!
They come in next in the popularity chart. 50% of the fund savers opt for equity funds, and only one third of them prefer to choose fixed income funds. Although equity funds are more risky, the level of return is also generally higher. Hence, they score more than the fixed income funds, where the return is fixed at a lower risk. Emerging market funds are most popular among the equity funds, while Swedish funds follow in closely. The money from these funds reaches the share market where it is used for investment. Instead of treading in these zones yourself, going through an equity fund reduces the level of risk. With such fund save, in case of a poor market, you are at least assured of your principal, and the losses cannot touch you. In case you are into share business yourself, you have the risk of bearing the brunt of heavy losses from time to time.
Fees and risk
While choosing a fund save option, the Swedes first look at the fees and then the risk cover. Obviously, they go for the funds with lower risks, although there are exceptions. But the fund fees play a vital role. That is why the companies are forced to keep control over the fund fees; otherwise, they will become uncompetitive in the market, losing potential customers.
While only 30% of the Swedes are aware that their returns from funds are with the fees already deducted, 50% of them evaluate fund saving based on the history of a fund. Looking at the recent history tells a lot about the company. The share market may not be aware of the decisions of a company taken internally, but looking at the recent trends of a share or a fund can reveal a lot about its intentions. Of course, the Swedes choose those with a healthy historic value, in spite of giving lower returns.
Data shows that women in Sweden are equally aware of investment funds as men are. Thus, the whole demography shows a high level of awareness about fund saving (even in Europe according to the “Danskeinvest Spara tips på bra fonder” campaign). This is one among the many good things that people of the world can learn from this Scandinavian member country.
Many are afraid of fund saving because they know little about it. Why don’t we learn from the smart Swedes and take a cue or two to try out?
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