In January–March, OP's customers invested 72% more euros in equity funds than in the corresponding period a year ago.

At the beginning of last year, many investors favoured fixed income funds over equity funds because of the higher interest rates. For example, investments in long-term bond funds in January–March this year were around 40% lower than in the corresponding period last year.

"Investors' risk appetite has increased notably from last year. The same phenomenon can be seen across the Finnish fund market, as equity funds obtained more new net asset inflows than any other fund class in January–March," says Kai Kalajainen, Director, Wealth Management at OP.

"The US stock market in particular has grown strongly, and many investors have sought to get a share of this growth. This year, the OP-America Index fund, which invests in the US equity market, has been the most bought fund in gross terms among OP's personal customers. Of all funds in Finland, it also gained the greatest number of unitholders in January–March," Kalajainen says.

Overall, mutual fund investors have been more prone to make purchases this year than last year. During the first quarter, purchases accounted for 63% of OP's funds transactions, compared to 59% in the same period last year.

Equities now favoured in OP's investment insight

In its allocation of assets across different asset classes, OP Asset Management overweights equities and underweights fixed income investment.

"The overweight of stocks is supported by companies' strong global earnings growth, central banks' expected expansionary monetary policy and the relative costliness of fixed income investments involving credit risks compared to investment in stocks. The global macroeconomic outlook now supports risky asset classes such as stocks," says Jussi Hyöty, OP's strategist.

According to OP Asset Management, other potential risk factors for the market currently include a deterioration in the geopolitical situation and inflation decelerating more moderately than expected, which would put central banks under pressure to postpone future interest rate reductions.

"Despite the risks, the expected return on the capital market looks promising for portfolios combining fixed income and equities, with fixed income providing security against unexpected risks. However, investors should always ensure appropriate risks management through wide global diversification, for example," Hyöty points out.

Read more about OP Asset Management’s investment insight

OP Asset Management’s investment insight tells you which markets OP Asset Management’s specialists expect to offer the best return outlook, and how OP’s portfolio managers weigh different markets in funds and portfolios.

OP Asset Management Ltd (later “OP Asset Management”) is an investment management firm under OP Financial Group, the operations of which are supervised by the Finnish Financial Supervisory Authority. OP Asset Management provides institutional clients, other entities and wealthy individuals with asset and wealth management services. OP Asset Management can also act as the portfolio manager for OP Funds. This content, produced by OP Asset Management, is considered general market information that does not fulfil the conditions of independent investment research. OP Corporate Bank plc produces independent investment research at OP Financial Group. The presentation is based on public sources and on information which OP Asset Management deems reliable. However, this does not exclude the possibility that the information may be incomplete or contain errors. OP Asset Management or its employees are not responsible for the financial result of investment decisions based on information obtained from this presentation or website, or for any other loss that may arise from using information contained in this presentation. This presentation does not constitute investment advice and is not intended as an offer to buy or trade any securities or as encouragement to buy or sell financial instruments of any kind. 

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