Investment Funds in Iran’s Capital Market
As one of the financial instruments active in Iran’s capital market, investment funds started their activity in early 2007, which have now grown significantly both in number and value to meet investors’ rising demand. The current article will review the H1 performance of investment funds in the market*.
Currently, investment funds fall within five categories of Equity, Fixed-Income, Mixed, ETF and Market Maker whose requirements, including asset combination are set by the Securities and Exchange Organization of Iran (SEO). The following table provides details on each type up until the first half of the current year ended 22 September 2017.
NAV and Asset Combination
The net asset value of all investment funds in Iran’s capital market reached IRR 1,379,036 bn over the first half of the current year, going up by IRR 70,033 bn with the fixed-income investment funds’ NAV contributing the most.
As can be seen in the figure above, funds’ net asset value has gone through significant fluctuations; it was descending before the Central Bank of Iran directive on lowering bank deposit interest rate was announced and implemented (September 2nd), but changed its direction afterwards. In fact, fixed income investment funds acted as a competitor for bank deposits and lower interest rates encouraged depositors towards such funds.
The following figure demonstrates changes in investment funds’ asset combination in the first half of the current year; as can be seen, cash and bank deposits have always seen the highest level of fluctuations.
Liquidity Inflow & Outflow
Capital worth IRR 788,706 bn has flowed into the funds over the first half while IRR 752,085 bn has flowed out, leaving IRR 36,622 bn as the net amount injected; fixed income funds has been the top gainer in this term attracting IRR 37,622 bn.
Investment Funds Performance
The following figure offers a comparison of equity funds’ Overall index with the stock market All-Share index in the 6-month period ended September 22nd, which clearly depicts the TEDPIX out-performance.
Investment Funds with Superior Returns in the Country
*Taken from Mahname-e Bourse (Monthly) Magazine
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