Funds for beginners: how to choose your first fund
Many Swedes with an ISK leave their money sitting as cash instead of investing it. That’s the most common and most expensive mistake you can make. This guide shows you what to buy and why.
What is a fund?
A fund is a basket of shares or bonds that you buy as a package. Instead of choosing individual stocks you buy a share in hundreds of companies at once. It spreads risk and requires no expertise.
An index fund tracks a market index, like the Stockholm stock exchange or global markets, and has low fees because no human manager needs to make decisions. Research shows index funds outperform actively managed funds over the long term in most cases.
The main fund types
Global fund (index)
RecommendedInvests in hundreds of companies around the world. Low fees, broad diversification. The best choice for most beginners.
Sweden fund
Focuses on Swedish companies. Higher risk because you’re exposed to a single economy.
Actively managed fund
A manager picks stocks. Higher fees and rarely beats the index over the long term.
Bond fund
Lower risk and lower returns. Works as part of a safer portfolio, not as a sole investment.
How to buy your first fund
- 1
Open an ISK on Avanza or Nordnet
Both are free and charge no fees on the ISK account. It takes 5 minutes with BankID.
- 2
Search for Avanza Global or AMF Aktiefond Global
Both are cheap global funds with low fees (0.05 to 0.4%). They’re the most popular choices among Swedish small savers.
- 3
Buy for any amount
There’s no minimum. Start with what you have.
- 4
Set up monthly saving
Do it automatically. Most platforms let you set up automatic buying in a few minutes.
The most common mistakes
- ×
Leaving money as cash on the ISK
Cash on an ISK earns 0% but you still pay flat tax. Buy a fund straight away.
- ×
Choosing an actively managed fund with high fees
A 1% fee difference costs you tens of thousands of kronor over 20 years. Choose index funds with fees below 0.2%.
- ×
Selling when the market drops
The market always goes up and down. Those who sell during a drop realise losses. Those who stay put get their money back when it turns.
Platforms we like
Buy your first fund today
These platforms are free for basic use and charge no fees on ISK. Links are affiliate links.
Nordnet
AMF Aktiefond Global is available on Nordnet with low fees and broad global index exposure.
Open ISKThese links are affiliate links. We earn a small commission if you use the service, at no extra cost to you. Read our policy.
Next step
Which account should you use?
Now that you know what to buy, read our guide on ISK so you understand how the tax works.
Read the ISK guide