Investor Activity and Returns in the Swedish Premium Pension

Sammanfattning: By comparing individuals from a large sample of pension savers in the Swedish Premium Pension System, this study investigates what effect activity has on absolute returns within the programme. Further, we examine if there are differences in returns and activity across groups of different characteristics. We find that activity has a negative effect on the investor returns. The most profitable group is found to be the one with completely inactive investors, with a 100 percent allocation of their capital in the default fund. Moreover, we find a negative effect of using premium pension advisors. Finally, the results imply that income is positively related to returns while age, on the other hand, is negatively correlated to it and that returns to male versus female investors does not differ significantly.