End of crisis to lower cash funds' return
27.11.2009, 08:16
Economic recovery to prompt withdrawal from
collective schemes, deposits
Interest rates on deposits have started falling gradually but that will
affect the return of money market funds, portfolio managers told the Pari daily.
That is so because most of the assets of this type of schemes are invested in
deposits.
Haven
In 2008 cash funds were the only collective form of
investment that did not lose investors' money, Elana Fund Management's Ivaylo
Penev said. Cash funds are one of the safe havens in times of crisis. The return
of some funds has reached 8% since the beginning of the year.
The Bulgarian
economy is facing a few difficult quarters and investments in money market funds
should be considered an attractive low-risk investment, Raiffeisen Asset
Management's Alexander Lekov pointed out.
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Turn
As the crisis comes to an end the return of cash
funds will decrease and investors will switch to higher-risk schemes, analysts
said. The expectations for a decrease in interest rates and revival of business
activity will result in the withdrawal of resources from both cash funds and
bank deposits, Astra Investment's Severin Vartigov commented. Portfolio managers
are adamant that investors' appetite to risk is rising and they are starting to
look for higher-yield opportunities for their free capital.