Investment funds market continues recovery, up 23%

2024-06-20 10:58:00, Ekonomi CNA

Investment funds market continues recovery, up 23%

Illustrative photo, taken from Google

The market of investment funds continued its recovery in the first quarter of this year.

According to official data from the Financial Supervision Authority (AMF), the net assets of these funds reached ALL 51.7 billion, an increase of 2.8% compared to the end of last year and 23% compared to the same period last year.

However, the value of the assets is still far from the historical maximum level, which was reached in 2021, in the value of almost 82 billion ALL.

The mutual fund market was hit hard in 2022 by the rapid growth of

interest rates and yields in the financial market. This devalued the portfolio of securities held by investment funds, led to a decrease in asset values ??and significant withdrawal of members from the funds.

However, the containment of the increase in interest rates during 2023 caused the fall in the value of assets to be curbed. Based on data from management companies, most funds have returned to positive territory in terms of annual return on investment.

An even more important development was the increase in the number of members in these funds. The number of members reached 33 243, increasing by 3.3% since the beginning of 2024 and by 15.5% compared to the same period of the previous year.

This is also an indicator of the gradual recovery of investors' confidence, after the mass departure during 2022. However, the number of investors is still far from the level of more than 40 thousand subjects (overwhelmingly individuals) that was registered before the rate increase of interest, at the end of 2021.

Investment funds in Lek have concentrated their investments especially in bonds and bonds of the Albanian government and to a lesser extent in liquid assets (bank account). Funds in foreign currency have a wider spectrum of investments, but even there, the financial instruments of debt of governments and commercial companies dominate in volume. Some of the funds are also engaged in investments in shares, but their specific weight in the market remains low.

At the end of the first quarter of 2024, 14 investment funds were active in the market, managed by five different management companies.

The market is dominated by local currency funds, which account for almost 93% of the net asset value of investment funds in financial instruments. However, in the last two years, the value of funds in foreign currency has also been negatively affected by the effect of the exchange rate.

Among the funds, the largest by a significant margin remains the Lek investment fund, Raiffeisen Prestigj, with almost 63% of the market's net assets. The other Lek fund of Raiffeisen Invest company, Raiffeisen Vizion, follows, with approximately 17% of the net value of assets. Among foreign currency funds, the largest is Raiffeisen Invest Euro, with 6.5% of the net value of assets.

Meanwhile, the alternative investment funds, Sea Land and Green View, which already account for almost 9.4% of the market's net assets, have been increasing in the last two years. The assets of these funds are mainly invested in real estate and the increase in property value has had a positive effect on the total assets of these funds. /Monitor