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Swedish bonds hot top ranking in 2011 as the economy gives investors confidence

Monday, 02 January 2012
Bond funds world wide have been very popular with investors during the recession. During the past six of the last eight quarters, bond funds have been the bestselling fund, according to various industrial data. Among those making great money from these funds in the Swedish gilt edge bond funds or what is known here as the Swedish paper.

Investor nervous about equities after a decade in which shares have gone nowhere, where the Stockholm stock market has barely stood still in 2011, and investors searching for sources of income as interest rates have stayed at record lows have tended to look elsewhere and the bond market seem to have beckon.


Bonds are also seen as a safe haven in times of turbulence, but recent events across Europe have shown that while they may be lower risk than equities, they are by no means risk free.
Therefore investor have taken their times and selected where they thing the best returns come be tapped.

Of those seen as safer are the Swedish which has been classed as some of the best investments of 2011.  Swedish government bonds with 10 years maturity reached a yield of 30 per cent, writes the Swedish business daily, Dagens Industri.

The safe Swedish government bonds became a true top ranking 2011, in a report which   Bloomberg presented showing that bond markets outperformed all other types of investments for the first time since 1997.

Swedish government bonds are ranked among the tops. A 10-year Swedish government bond yielded a total of 30.5 percent last year, writes the Swedish daily, Dagens Industri.

Top returns


Total returns on government bonds with 10 years maturity
Sweden 30.52
U.S. 29.11
UK 27.6
New Zealand 23.7
Denmark 23.66
Australia 22.68
Canada 19.26
Germany 18
Switzerland 17.44
The Netherlands 16.14
Source: European Federation of Financial Analysts Societies / Bloomberg
"The value of a bond is determined by the course the country is taking and Sweden has a very good seat in international comparison. It is the fundamental reason why Sweden comes out top, "said Director General of the Swedish Debt Office, Bo Lundgren, to the paper.

Even U.S. Treasury securities have increased in popularity and leads according to Bloomberg’s league of returns. Debt securities have generally yielded 5.9 percent in return over the world according to Bank of America Merrill Lynch index.

Standard & Poor's Commodity Index fell 1.8 percent while shares and the MSCI All Country World Index fell 6.9 percent throughout.
By Scancomark.se Team

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