Swedish online broker Avanza Bank has reported a significant shift among its fund investors, who have increasingly moved their capital from U.S.-focused funds to European alternatives throughout March.
According to Avanza, net purchases were highest in European funds, followed by Swedish funds and investment company funds.
“Despite ongoing political uncertainties, European indices, particularly DJ Europe, have delivered gains exceeding 10% since the start of the year. Additionally, there is a notable demand for defense industry investments, as evidenced by the Finserve Global Security fund ranking as the third most net-purchased fund in March,” said Felicia Schön, private economist at Avanza.
At the same time, global funds—primarily dominated by U.S. holdings—were the most sold category.
“Since peaking at the end of January, global funds have declined by up to 15% in recent months. This drop is largely attributed to currency fluctuations, with the Swedish krona strengthening by more than 10% against the U.S. dollar over the same period. This sharp currency effect is uncommon and not widely recognized among everyday investors. As a result, many may perceive the U.S. market downturn as more severe than it actually is,” Schön explained.
The shift in investment trends reflects growing investor confidence in European markets and a cautious approach toward U.S. equities amid currency volatility.
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