{"id":34033,"date":"2021-09-13T14:15:00","date_gmt":"2021-09-13T18:15:00","guid":{"rendered":"https:\/\/philip.greenspun.com\/blog\/?p=34033"},"modified":"2021-09-13T16:33:39","modified_gmt":"2021-09-13T20:33:39","slug":"best-way-to-invest-in-sweden","status":"publish","type":"post","link":"https:\/\/philip.greenspun.com\/blog\/2021\/09\/13\/best-way-to-invest-in-sweden\/","title":{"rendered":"Best way to invest in Sweden?"},"content":{"rendered":"\n<p>As readers may have noticed, I&#8217;m a contrarian when it comes to COVID-19 (along with <a href=\"https:\/\/gbdeclaration.org\/view-signatures\/\">the 60,000 physicians and PhDs who&#8217;ve signed the Great Barrington Declaration<\/a>). To me, the untested &#8220;experiment&#8221; is locking a country down and closing schools in hopes of winning a war against a respiratory virus. It is not an &#8220;experiment&#8221; to stay open, as Sweden did (and <a href=\"https:\/\/philip.greenspun.com\/blog\/2021\/02\/23\/who-guidance-on-pandemics-then-and-now\/\" data-type=\"post\" data-id=\"31216\">as the W.H.O. recommended through 2019<\/a>), and continue to educate children, continue to go to work, continue to hit the gym, continue to socialize with friends and family, etc. I don&#8217;t think the U.S., for example, will be better off as a result of shutting down, closing schools, <a href=\"https:\/\/www.poverty-action.org\/publication\/impact-community-masking-covid-19-cluster-randomized-trial-bangladesh\">buying and wearing cloth masks that have been shown to be worthless<\/a>, etc. I do think the Swedes will prosper in the long run due to superior mental health, a focus on something other than COVID-19, their kids having an extra year of in-person school compared to kids in U.S. cities, etc. I want to invest in Sweden with a 10-20-year horizon.<\/p>\n\n\n\n<p>(Based on our devotion to the <a href=\"https:\/\/philip.greenspun.com\/blog\/2021\/08\/03\/vietnam-war-analogy-for-covid-19-holding-up\/\" data-type=\"post\" data-id=\"33387\">Vietnam<\/a> and Afghanistan wars, we could still be fighting the COVID-19 war 10-20 years from now! Even if we aren&#8217;t, the misallocation of $trillions from the past 1.5 years, e.g., paying people to stay home for 1.5 years (<a href=\"https:\/\/www.usatoday.com\/story\/news\/nation\/2021\/09\/08\/covid-19-unemployment-benefits-ending-states-extend-them\/5761182001\/\">$800 billion just from federal tax dollars<\/a>), giving <a href=\"https:\/\/philip.greenspun.com\/blog\/2021\/07\/15\/government-gives-americans-new-reasons-to-fight-over-custody-starting-today\/\" data-type=\"post\" data-id=\"32723\">$3,600\/year extra per child to successful child support plaintiffs<\/a>, funding highway repairs in the least efficient states (the new &#8220;infrastructure&#8221; bill, which builds infrastructure everywhere other than in the states that actually need it due to growing population?), etc., will be a comparative drag on the U.S. economy.)<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large is-resized\"><a href=\"https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02204-scaled.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02204-1520x1013.jpg\" alt=\"\" class=\"wp-image-34035\" width=\"406\" height=\"270\" srcset=\"https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02204-1520x1013.jpg 1520w, https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02204-1024x683.jpg 1024w, https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02204-300x200.jpg 300w, https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02204-768x512.jpg 768w, https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02204-1536x1024.jpg 1536w, https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02204-2048x1365.jpg 2048w\" sizes=\"auto, (max-width: 406px) 100vw, 406px\" \/><\/a><\/figure><\/div>\n\n\n\n<p>What&#8217;s the best way to invest in Sweden? My usual preference is for common stocks, but apparently a lot of these can&#8217;t be purchased in the U.S. There is an ETF that tracks the Swedish market: <a href=\"https:\/\/www.ishares.com\/us\/products\/239684\/ishares-msci-sweden-etf\">EWD from iShares<\/a>. The dividend yield is medium (just under 3%), which I hope means that capital appreciation is expected. Somehow, <a href=\"https:\/\/www.ishares.com\/us\/literature\/tax-information\/2020-qdi-summary.pdf\">77 percent of the yield is classified as &#8220;qualified&#8221;<\/a> (I&#8217;d thought that this was for U.S. stocks) and therefore subject to a lower federal tax rate (if the Democrats are successful with their latest federal tax increase, the result will be a dividend tax rate of about 50 percent for Californians (fed+state) and this will be on top of higher corporate taxes (i.e., something like 75% of a company&#8217;s profits that would have belonged to shareholders will instead go to pay taxes); things are <a href=\"https:\/\/philip.greenspun.com\/blog\/2021\/07\/14\/effect-on-childrens-wealth-when-parents-move-to-florida\/\" data-type=\"post\" data-id=\"33257\">a little less grim for residents of Florida<\/a>).<\/p>\n\n\n\n<p>The big negative of this iShares fund is a 0.51 percent management fee. They&#8217;re just trying to track the index, so it is unclear what you&#8217;re paying them for (how hard is it to buy and hold 53 stocks?). The fee for <a href=\"https:\/\/investor.vanguard.com\/etf\/profile\/VOO\">the Vanguard S&amp;P 500 ETF<\/a> is 0.03 percent, which is also the fee for the corresponding iShares S&amp;P 500 ETF.<\/p>\n\n\n\n<p>The big negative of Sweden as an investment, if you&#8217;ve been reading this blog, is that I don&#8217;t believe the prevailing American dogma that low-skill migrants make a country richer (if they did, Canada and European nations would be vying for and paying for the opportunity to fly low-skill migrants from our southern border to their respective countries). At 25 percent, Sweden has, I think, the highest percentage of immigrants or children of two immigrant parents, of any country in Europe. If these folks prefer not to work, that could be a drag on the Swedish economy (via welfare costs) for the next 100 years. See <a href=\"https:\/\/www.reuters.com\/article\/us-sweden-unemployment-pandemic\/new-swedes-left-out-as-economy-powers-through-pandemic-idUSKBN2B91MO\">&#8220;&#8216;New Swedes&#8217; left out as economy powers through pandemic&#8221;<\/a> (Reuters, March 17, 2021):<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>Sweden has powered through the COVID-19 crisis with an economy set to regain its pre-pandemic size by late-2021, but a surge in unemployment among its foreign-born citizens risks exacerbating social divisions for years to come.<\/p><p>Ajlan came to Sweden as a 17-year-old from Baghdad in 1993. Despite graduating with a degree in Middle Eastern Studies from Lund University &#8211; one of the country\u2019s best schools &#8211; he only found work as a taxi driver.<\/p><p>A rigid labour market and a lack of low-skilled jobs means Sweden has been poor at integrating waves of immigrants, or \u201cnew Swedes\u201d, since the 1970s &#8211; a social and economic divide that has been widened further.<\/p><p>Unemployment among foreign-born workers stood at 18% in the fourth quarter of last year, up 3.5 percentage points from a year earlier, according to Statistics Office data. For people born in Sweden, it was 4.1%, up just 1 percentage point.<\/p><p>Immigration has been running at high levels for the past two decades in Sweden, with a record 163,000 asylum seekers arriving in the country of 10 million in 2015.<\/p><p>The government has launched a raft of measures &#8211; some of which predate the pandemic &#8211; aimed at getting people into work, including subsidized employment, tax breaks for employers, on-the-job training schemes and its \u201cknowledge-lift\u201d programme that offers study opportunities for the unemployed.<\/p><\/blockquote>\n\n\n\n<p>In other words, the Swedes don&#8217;t have any better idea of what to do with low-skill migrants than we do. They&#8217;re on the same &#8220;provide free housing, free health care, free food, and then ask people nicely if they would like to work&#8221; plan (maybe the Swedes don&#8217;t offer an <a href=\"https:\/\/www.obamaphone.com\/\">Obamaphone<\/a>, but mobile phone service in Europe is much cheaper than in what we call our competitive market).<\/p>\n\n\n\n<p>On the third hand, the U.S. and all of Europe are going to be packed with low-skill migrants for the foreseeable future. The only way to short the idea of a migrant-packed welfare state is to invest in Asian countries that are closed to low-skill immigration and that, in any case, don&#8217;t offer the multiple generations of free housing, health care, and food that the U.S. offers and that some European countries offer (albeit at a less generous level; see <a href=\"https:\/\/en.wikipedia.org\/wiki\/Hartz_concept\">Hartz IV in Germany, of which 55 percent of the recipients are migrants or children of migrants<\/a>: &#8220;According to the Federal Employment Agency &#8230; this was due to the migrants lacking either employable skills or knowledge of the language&#8221;).<\/p>\n\n\n\n<p>Vaguely related&#8230; the Volvo-driving migrants arrive in Stockholm on the ferry from Finland (2016):<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large is-resized\"><a href=\"https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02261-scaled.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02261-1520x1013.jpg\" alt=\"\" class=\"wp-image-34034\" width=\"694\" height=\"462\" srcset=\"https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02261-1520x1013.jpg 1520w, https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02261-1024x683.jpg 1024w, https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02261-300x200.jpg 300w, https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02261-768x512.jpg 768w, https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02261-1536x1024.jpg 1536w, https:\/\/philip.greenspun.com\/blog\/wp-content\/uploads\/2021\/09\/DSC02261-2048x1365.jpg 2048w\" sizes=\"auto, (max-width: 694px) 100vw, 694px\" \/><\/a><\/figure><\/div>\n","protected":false},"excerpt":{"rendered":"<p>As readers may have noticed, I&#8217;m a contrarian when it comes to COVID-19 (along with the 60,000 physicians and PhDs who&#8217;ve signed the Great Barrington Declaration). To me, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[52,38],"tags":[],"class_list":["post-34033","post","type-post","status-publish","format-standard","hentry","category-europe","category-investing"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Best way to invest in Sweden? - Philip Greenspun\u2019s Weblog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/philip.greenspun.com\/blog\/2021\/09\/13\/best-way-to-invest-in-sweden\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Best way to invest in Sweden? - Philip Greenspun\u2019s Weblog\" \/>\n<meta property=\"og:description\" content=\"As readers may have noticed, I&#8217;m a contrarian when it comes to COVID-19 (along with the 60,000 physicians and PhDs who&#8217;ve signed the Great Barrington Declaration). 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