The total net assets of 98 active open (Croatian) investment funds with public offerings have decreased over the year from 30.2 billion to just 10.6 billion kuna, or by as much as 65 percent. In other words, the value of shares in the funds has dropped by nearly two-thirds over the year.
The returns of the funds this year range from plus 6.9 to minus 64.5 percent. At the end of October this year, around 80 funds had a negative sign, while only 18 were performing positively. Thus, four out of five funds ended in the red in the past part of the year. The largest decline in assets is recorded by equity and mixed funds, while bond funds have seen a somewhat smaller average decline. On the other hand, only the most conservative money market funds, whose assets do not directly depend on stock prices, have achieved some growth in assets during the past part of the year. Most analysts agree that the significant declines in fund assets in the past part of the year were also due to the continuation of the negative trend in both domestic and global capital markets, as well as due to large withdrawals and ‘flight’ of money from the funds this year.
Namely, large payouts and panic exits from funds forced some open investment funds to sell large quantities of stocks from their portfolios in a very short time, which further intensified the negative trend in the capital market and caused the prices of some stocks to drop by as much as 70 percent this year. This has correspondingly lowered the value of shares, or the total assets of open investment funds, by approximately the same percentage. Even more than the previous decline in assets, investors, and even fund managers themselves, seem to be concerned about chronic illiquidity and uncertainty, or the question of how long the crisis of the funds will last.
