I have a file with Swedish characters in it (åäö) encoded with UTF8.
- name: 'Magler<F6>d, S<F6>der<E5>sen',
- name: 'Magleröd, Söderåsen',
@matt and @twalberg were correct. The file wasn't actually UTF-8 encoded. Trying to figure this out wasn't helped by the fact that my terminal (hterm) can't input åäö properly (but it can display and copy/paste them)...
iconv -f ISO-8859-1 -t UTF-8 in.txt > out_utf-8.txt
solved my issue