Sweden – How to Invest in the OMXS 30 Index? [Guide]

It is no secret that it is worth investing in countries with a stable legal system and solid foundations for further growth. This is exactly such a country. Sweden. Nowadays you can easily invest in Swedish indices (e.g. OMXS30) and easily have exposure to this index.

Sweden is one of the most developed economic areas in the world. It is also an interesting place to invest in companies. Although taxes are not the lowest, on the other hand the law is stable. Another big advantage is the high Corporate Governance Swedish companies. In the case of many large, medium and small entities, skillful capital management is visible, which in turn translates into high rates of return on investment. What's more, this small country can boast a global company, whose services are used by hundreds of millions of people. It is from Sweden that the Spotify, even though it debuted on the US stock exchange. However, among other global brands, we can mention H&M, Ericsson, Electrolux, Volvo, Husqvarna, Assa Abloy. As you can see, this sparsely populated country is home to many large enterprises.

Sweden – one of the richest countries in the world

Sweden is presented as one of the examples “Scandinavian economic model”. This is interesting because if we look at the country's development in recent decades, it is generally not very fast. The pace of development is similar to Germany's. Interestingly, the USA maintained its advantage over Sweden from 1990 to 2023 (so we are talking about 33 years!). In 1990, GDP (in purchasing power parity) per capita was 17% higher in the USA than in Sweden. The same is true in 2023. This is intriguing because there should be a convergence phenomenon between the most developed areas of Western Europe and the USA. However, this has not been the case for 30 years.

The chart shows, however, that wealth is not a given once and for all. A great example is Italy, which has been falling behind Germany and Sweden since 2004. The lack of reforms, an aging population, and the adoption of the euro are some of the factors that have undermined Italy's competitiveness. Poland has benefited from this, starting to catch up with the most developed economies in Europe.

Sweden was still struggling with a high debt to GDP ratio in the early 90s, exceeding 70% of the Gross Domestic Product. The percentage may not seem very high (compared to Japan, Italy or the United States), but Sweden has kept its budget in check for hundreds of years. It managed to reduce the debt to GDP ratio very quickly. This is therefore an interesting example that in order to maintain a satisfactory rate of economic growth, you don't have to incur excessive debt, even if you are the issuer of your own currency. So if you want to invest in a country that has managed its budget sensibly for many years, Sweden may be an interesting choice.

Another interesting aspect is demography. The number of births per woman in Sweden is 1,67, which is below the replacement level (2,1). However, it is still much higher than the indicator for Poland (1,33). So we can say that in the case of Poland there is a risk that demographic problems will slow down convergence and we will become a "second Japan". Sweden is in a slightly better position and has a better budget and demographic situation. Of course, this does not mean that Sweden is not without problems. One of them is crime problems in larger cities.

How to invest in Sweden?

It is hard to resist the impression that Sweden is an interesting investment destination. One idea might be to invest in shares of companies listed on the Stockholm Stock Exchange. However, when you do not want to choose companies yourself, you can decide to expose yourself to Sweden using the main index.

OMXS 30 Index – exposure to the 30 largest companies

The most important index in Sweden is OMX Stockholm 30 (OMXS 30). This is an index that groups the 30 largest and most liquid companies on the Swedish market. The aforementioned 30 companies are selected based on capitalization and liquidity. However, only companies that are included in the OMX Stockholm All-ShareTM Index can be included in the OMXS 30. It is worth mentioning that the OMXS 30 index is weighted by capitalization and the number of shares in free float is not taken into account to calculate the weights. The index is updated once every six months, and changes are introduced in the first sessions of January and July.

The OMXS 30 is also one of the most important indices in Northern Europe. Although the Swedish economy is much smaller compared to countries such as Germany or France, the OMXS 30 is closely watched by European investors and those who follow niche  industries that are strongly represented in Sweden (e.g. the timber and paper industry).

For many global investors, investing in the OMXS30 is a tool for exposure to the developed Scandinavian market and the Northern European region. Countries belonging to this part of Europe are characterized by economic stability and low government debt. Thanks to the international presence of many companies in the OMXS30, this index reflects not only the health of the Swedish economy. Changes in commodity prices, exchange rates or the economic condition of Sweden's main economic partners can have a strong impact on the OMXS30.

If we look at the sectors that make up the OMXS30 index, we can see a large overrepresentation of companies from the industrial sector. According to data presented by NasdaqOMX, industrial companies have as much as 41,4% of the total capitalization of the index. In second place are financial companies with a share of 24,9% (mainly banks). However, there is a very small representation of technology companies (only 5,5% of the index) and consumer goods (totaling less than 12%). With exposure to OMXS30, one has mainly industrial and financial stocks. Industrial companies tend not to grow rapidly, which makes it difficult to generate high rates of return in the long term.

Since Sweden is a small country (about 10,5 million people), the largest Swedish companies are focused on export. Therefore, for the health of many companies it is important that the Swedish krona is not too strong. A weak SEK means more competitive goods, especially if they are produced in Sweden.

Importantly, the index is somewhat concentrated. The 10 largest components of the OMXS30 account for over 60% of the entire index (in terms of capitalization). It is worth noting that the top ten does not include one of the most famous clothing brands in the world: H&M. Other well-known companies that are not in the TOP 10 but are part of the index include Electrolux and Ericsson.

However, we will find many companies that you probably haven't heard of. Among them are:

• Atlas Copco AB – is a manufacturer of tools for the mining and industrial sectors. Products include air compressors, nitrogen, electricity and steam generators.
• Investor AB – this is one of the largest investment companies in Sweden. It has shares in many well-known companies such as SEB or ABB.
• Skandinaviska Enskilda Banken (SEB) – it is one of the largest Nordic banks, which offers its services to both individual and corporate clients.
• Assa Abloy AB – this is one of the leaders in the door lock and security market. Its offer includes both “traditional” mechanical locks and those that are opened electronically.
• Sandvik AB – is a manufacturer of rock processing tools and machines for the mining and engineering industries.
• Hexagon – a technology company specializing in solutions related to geospatial services. They offer GIS (Geographic Information Systems) technologies and spatial data management tools.

Of course, the top ten also includes companies that are more widely known in the investment world. These include Volvo and AstraZeneca.

Smaller companies with interesting business models include:

• Saab AB – Swedish manufacturer of defense systems and aircraft parts for the aviation and defense sectors. One of the company's most famous products is the Gripen military aircraft.
• Essity AB – manufacturer of hygiene and dressing products, such as wipes, diapers and medical dressings.
• Evolution AB – A provider of technology for online casinos. It is one of the leaders in the niche of providing software and solutions for online casinos.
• Svenska Cellulosa AB (SCA) – a company that deals with forest management and the production of products and semi-finished products from wood and cellulose. The company operates mainly in the paper and packaging sector.

How to invest in OMXS30?

There are various ways to invest in the index. These include:

• purchase of futures contracts on the OMXS 30 index,
• taking advantage of the offer of ETFs and shares,
• exposure using CFD instruments.

Futures contracts

The OMXS30 futures contract is not one of the smallest. This is due to the fact that the multiplier is 100 SEK (Norwegian kroner). Therefore, considering that the index is currently quoted above 2 points, the nominal value of the contract is currently 600 SEK, or about PLN 260 thousand. This is a much higher value than for the WIG 000 index. However, it is possible to invest in a mini version, which has a multiplier of 98,6 SEK. This means that in the case of the mini, the nominal value of the contract is less than PLN 20 thousand. The disadvantage of this solution is that not all brokers allow trading in this instrument.

ETFs and stocks

Using ETFs with exposure to the Swedish market can be an interesting idea for a long-term investor. However, it is difficult to find a liquid ETF, which has exposure to the OMXS30 index itself. It is much easier to find solutions like iShares MSCI Sweden, but in the case of this ETF we are dealing with 44 components, not 30. So it is not a product with ideal exposure to the 30 largest and most liquid companies from Sweden. An alternative is to buy shares yourself in the form of stocks.

Brokers offering ETFs and stocks

More and more brokers have a wide range of stocks and ETFs in their offer. For example, XTB today we find over 400 ETFs and 3500 shares, almost 3000 ETFs and 19 shares in Saxo Bank and over 10 ETFs and as many as 000 shares in Exante.

Broker
Country	Poland	Denmark	Cyprus
Number of shares and ETFs on offer	approx. 400 - ETF approx. 170 - CFDs on ETFs approx. 3500 - shares approx. 2000 - CFDs on stocks 16 exchanges	3000 - ETF 675 - ETF CFDs 19 - shares 8 - CFDs on stocks 37 exchanges	10 – ETF 55 - shares 50 exchanges
Min. Deposit	0 PLN (recommended min. PLN 2000 or USD 500, EUR)	0 PLN / 0 EUR / 0 USD	10 000 EUR
Tool	xStation	SaxoTrader Pro Saxo Trader Go	Exante platform
	REVIEW	REVIEW	REVIEW
	CREATE AN ACCOUNT	OPEN AN ACCOUNT	CREATE AN ACCOUNT

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. From 72% to 89% of retail investor accounts record monetary losses as a result of trading CFDs. Think about whether you understand how CFDs work and whether you can afford the high risk of losing your money.

CFDs

Another solution is to take advantage of the offer CFDs, which on the one hand provides the possibility of concluding transactions with smaller values ​​than the classic OMXS30 futures contract. On the other hand, CFD includes operational leverage, which means that it is not an instrument for people who would like to invest for a long term, as in the case of ETFs.

There are not many brokers on the market that offer CFDs on the OMXS 30 index, but one of the exceptions is IC Trading.

Broker
Country	Cyprus / Australia / Mauritius
Symbol OMXS 30	SE30
Min. Deposit	200 USD
Min. Lot value	b / d
Commission	-
Tool	MT4, MT5, cTrader
	REVIEW
	CREATE AN ACCOUNT

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. From 72% to 89% of retail investor accounts record monetary losses as a result of trading CFDs. Think about whether you understand how CFDs work and whether you can afford the high risk of losing your money.

Summary

The OMXS30 index is one of the most important benchmarks for the Swedish stock market. This index includes many companies with interesting business models and systematically increasing their market shares. One of the disadvantages of the index is its excessive exposure to the industrial sector. Companies operating in the area of ​​new technologies are hard to find. However, there are a few "raisins" that have conquered their market niches. One example of such a company is Evolution gaming, which has taken the online casino software market by storm. However, most of the components are companies operating in the old economy. A big advantage of investing in this index is exposure to the Swedish economy, which, although experiencing temporary problems, has solid foundations for growth in the coming years.