Mutual funds” investment dramatically shifted towards the capital market, but monetary instruments still have the heaviest weight in total assets registered at the mutual fund market level.
The weight of listed stock included in mutual funds” portfolios advanced late last year to 25.1%, compared with a mere 5.3% at the end of December 2004. Placements by mutual funds on the Bucharest Stock Exchange were worth above 23.2 million euros at the end of 2005, eight times higher than investments logged in the previous year.
This spectacular increase was primarily due to the solid progress of the Stock Exchange, which pushed the value of placements higher, as well as to the rising capital inflows in diversified and equity funds. Amid the interest rate slump, investors grew increasingly interested in riskier placement alternatives, pushing fund managers to boost their investments in listed shares, as well.
This was actually the drive behind the growth of the mutual funds in 2005, with equity and diversified funds offering superior gains to funds including fixed-income instruments.
Thus, the average yield offered by equity funds last year rose to 35% and to almost 30% in the case of diversified funds. Equity funds have been the most profitable in 2006, with some of them managing to provide yields of above 8% thus far, higher than the interest rate offered by a banking deposit over one year. The positive growth was primarily triggered by the increases the Bucharest Stock Exchange witnessed in January, when equity funds gained 8.2% on average. Slight corrections seen in February partly diminished these gains, with the downward trend maintaining at the beginning of this month. andrei.chirileasa@zf.ro