Last year, equity fund returns increased by up to 64 percent

In the past year, the total net assets of 94 active open investment funds with public offerings increased by 23 percent, from 9.3 billion at the beginning of the year to the current 11.4 billion kuna.

Positive  business results were recorded by about 80 funds last year, while around fifteen were in the red. In other words, almost eight out of nine funds managed to swim into somewhat calmer and winning waters in the last ten months. In the focus of investors last year, alongside equity funds, were money market funds, which recorded the largest increase in assets. Namely, thanks to high interest rates and returns in money markets, the value of their assets increased by a significant 54 percent to as much as six billion kuna. Among money market funds, the highest returns of 9.6 and 9.1 percent were achieved by Raiffeisen Cash and ICF Money Market. When it comes to equity funds, unlike the period before the crisis, when funds oriented towards the Southeast European markets achieved record returns, a turnaround occurred in 2009, highlighting funds that invest in global emerging markets such as Brazil, Russia, India, and China. Thanks to this orientation and investments, as many as seven out of a total of 44 equity funds achieved returns greater than 30 percent last year, with the two most successful in 2009 being the equity fund MP-Bric HR, which increased by a record 64 percent, and PBZ I-Stock, which recorded growth of over 53 percent.

On the other hand, it can be said that mixed funds achieved the worst results last year. Of the total of 19 mixed funds, almost half ended the year in the red. Among mixed funds, the most successful were OTP Balanced with 19 percent and ZB Global with a return of 14 percent, while the largest decline of as much as 38 percent was recorded by InterInvest Balanced. Finally, it should be noted that most bond funds also made positive results last year, which was not the case in the previous year, with the most successful being OTP Eurobond and Raiffeisen Bonds, which achieved returns of over 12.3 percent. Although at the beginning of this year, most funds are achieving quite good business results, no one dares to predict more precisely what will happen in the remainder of the year. Some bolder fund managers, however, have recently provided somewhat more concrete estimates. They claim that it is realistic to expect that more of our funds will orient themselves this year towards the aforementioned attractive markets (BRIC), but also that the establishment of specialized funds will continue, which will increase investors’ choices and facilitate access to some markets that might otherwise be inaccessible without funds.

It is also expected, they say, that the beginning of consolidation may occur, as the small assets of certain funds raise questions about the profitability of their operations. Therefore, solutions will likely be found in the merging of certain funds, and perhaps even management companies. When it comes to returns, it is assumed that this year, primarily due to the reduction in the cost of money, returns on money market funds may stabilize. In such a scenario, analysts expect that part of that money will flow into equity or mixed funds, especially if the forecasts about the final global exit from the recession and the recovery of the global economy prove to be true. Regarding specific possible movements in the value of net assets this year, as well as the returns of individual funds, it seems that most fund managers would not be dissatisfied if their funds maintained at least the momentum from the last quarter of last year in the coming months. (Nikola Prskalo)