Equity Funds Grew by About 50 Percent This Year

During the ten and a half months of this year, the total net assets of 94 active open Croatian investment funds with public offerings increased by 12 percent, or 9.3 billion to nearly 10.4 billion kuna.

According to analysts’ calculations, 82 funds reported positive business results in the past part of the year, while twelve recorded losses. In other words, eight out of nine funds have managed to swim into something calmer, or winning waters in recent months. Among the four types of funds, the most successful were the most numerous, equity and mixed funds. Of the total of 44 equity funds, about 30 achieved a return growth of over 15 percent in the past part of the year. The largest growth since the beginning of the year, even about 50 percent, is recorded by the equity fund MP-Bric.HR, with another four funds PBZ I-Stock, OTP Meridian 20, Raiffeisen HR Equities, and HPB Equity growing at rates higher than 24 percent in the last six months. In the mixed fund group, the highest returns in the past part of the year were achieved by OTP Balanced (22 percent) and Agram Trust with a growth of 16 percent. Among bond funds, the highest return, 11 percent, was achieved this year by Raiffeisen Bonds. Finally, among money market funds, the highest growth in the past part of the year of 8.7 percent is held by Raiffeisen Cash, followed by ZB Plus (8 percent) and PBZ Money with a 7.6 percent return growth. Interestingly, the declines among all funds, especially in the last three months, are minimal, rarely exceeding the threshold of three percentage points.

Although in the last three to four months there has been not only a halt in the decline of assets of almost all funds, which had been ongoing for more than a year, but also the first significant increase, or rise in net assets of the funds, market experts emphasize that it is still too early to conclude whether the fund crisis has truly come to an end. Financial experts say it could be said that we are now only seeing the first visible signs of the beginning of their recovery. Analysts also remind that investment funds were among the first to fall into crisis two years ago, so it could very easily happen that they start to pull themselves out of its ’embrace’ first. Others, more cautious, believe that the beginning of the recovery of funds in the real economy is unlikely without a return of optimism and (greater) overall liquidity in global and domestic capital markets, and of course, the willingness of investors to continue investing even more in fund shares.

They add that a complete recovery of funds (as well as the stock market) is only possible when not only large but also small investors start to return en masse to the funds. Since our funds still allocate part of their assets to foreign markets, as unofficial estimates suggest that they hold at least a quarter of their total assets in foreign markets, their further growth will depend on stock market and economic movements in those markets as well. Previous analyses indicate that among our equity and mixed funds, the best results are recorded by those that invest more in the markets of the southeastern EU region and Asia than those oriented towards the markets in the USA and Europe. Therefore, it will be very interesting to monitor the movements of returns from fund shares in the last two months of this year, both in the domestic and foreign markets. Some fund managers have recently provided somewhat more concrete estimates of possible future movements. They claim that they would not be dissatisfied if their funds, for example, maintain at least the dynamics of the rise achieved in the past three to four months in the next six months. (Nikola Prskalo)