New mapping of the investment fund sector's cross-border links

News, Staff memo A new Staff Memo has for the first time mapped the Swedish cross-border links generated by the investment portfolios of the rapidly growing investment fund sector. The author, Samantha Myers, senior economist at the Financial stability department, finds that while its activities are concentrated in Sweden, there are substantial and growing links to foreign markets that may have the potential to impact Swedish financial stability.

The Swedish investment fund sector has almost quadrupled in size since 2012. This industry does not operate in isolation, but rather forms a small piece of a highly interconnected global market.

Using microdata, the author has mapped in detail for the first time the Swedish cross-border investment linkages connected to the investment fund industry. The data indicates that while foreign ownership of Swedish funds is small, Swedish investors invest a substantial amount in funds domiciled abroad.

In addition, while Swedish funds have a significant home bias, over half of their portfolio securities were issued abroad, and invest significant amounts in healthcare and US technology companies. Finally, the author shows that foreign investment funds’ holdings of Swedish securities – especially short-term securities issued by Swedish banks – are substantial.

Staff memo

A Staff Memo provides members of the Riksbank’s staff with the opportunity to publish advanced analyses of relevant issues. It is a publication for civil servants that is free of policy conclusions and individual standpoints on current policy issues. Publication is approved by the appropriate Head of Department. The opinions expressed in staff memos are those of the authors and are not to be seen as the Riksbank’s standpoint.

Contact: Press Office, tel. +46 8-7870200
Updated 08/08/2023