Mutual fund management companies in Slovenia find that despite the increased uncertainty and drops on stock markets, investors continue to make net investments in mutual funds. They are optimistic in spite of the value of assets under their management having dropped slightly this year from a record-high of EUR 4.3 billion at the end of 2021.
There are currently five investment fund management companies in Slovenia, which manage 75 mutual funds that at the end of September managed around EUR 3.8 billion in assets.
They are associated in the Slovenian Investment Fund Association, whose director Mira K. Veljić told the press on Friday that the association was happy that investors continued to make net investments to mutual funds.
The association also welcomed the passage in parliament in July of new legislation that provides for three forms and two types of alternative investment funds, as it expects that the number of such funds in Slovenia will increase in the future.
The value of assets under management has dropped slightly this year from a record-high EUR 4.3 billion at the end of 2021, with the reason being a drop in the value of stocks and bonds, and not the investors withdrawing their funds, Veljić said.
Investments, which were also record-high last year, also dropped slightly this year, but withdrawals did not exceed them, with the association recording net investments. A shift from bond funds to equity funds has been also detected.
The latter still represent the bulk of the invested funds with a share of around two-thirds, followed by mixed funds (around 25%), while only a small share is represented by bond funds and money market funds.
In August, there were around 324,000 investors in mutual funds in Slovenia, 99.7% of which were individuals. The average value of assets under management per investor was around EUR 12,500, including investments by institutional investors.
The association’s president Benjamin Jošar sees the reasons for the investors’ trust in improved financial literacy and the effect of practically zero interest rates on deposits and fees for large deposits, which were only recently abolished.
The chairman of Triglav Skladi assessed that that the awareness is growing among Slovenians, who are known for their tendency to invest mainly in real estate and cash deposits, of the importance of investing in slightly riskier forms of saving.
The association thus made a repeated call for all forms of savings to be equally taxed in order to encourage investments and for financial literacy to be systemically promoted by the state, including in the public education system.
They believe this would result in a greater volume of investments in funds as, despite the positive developments in recent years, Slovenia is still in second to last in the EU in terms of the relative amount.
There is thus considerable room for growth, said Jošar, who believes that in the future, investments in less risky bond and money market funds, which would attract more reluctant savers, could also experience growth.
The association also wants to bust the myth that this kind of saving is reserved only for people with a lot of money, noting the growth in the volume of plans with monthly investments in funds.
In August, there were more than 59,000 such savers who invested almost EUR 4.9 million or slightly more than EUR 82 per person.