The traditional savings portfolio with a 5y horizon and “normal” risk aversion is often recommended to be allocated 60/40 or 50/50 between equities/bonds. As the economy grows, total savings should grow accordingly. As such, it is not surprising to see that net flows, according to the Swedish Investment Fund Association, are relatively constant into bond funds, although an average of ~13% y/y is eye-catching. Money Market funds, however, which one could suspect are used as a buffer account, show no trend.
We also note that, as rates became negative during the beginning of QE in 2015, savings growth was flat for about 2 years. Since 2017, however, there has been a steady positive trend of net inflows despite the lack of return potential (no running yield and asymmetric return outcome) – quite the opposite of what could have been expected and a fairly clear indication of systematic savings rather than tactical risk/reward driven savings.
