Iran Investment Funds Post 17.5% Average Gain

EghtesadOnline: A total of 213 mutual and exchange-traded funds in Iran's capital market posted an average return of 17.5% during the previous fiscal year (March 2017-18), data released by Financial Information Processing of Iran showed.

News ID: ۷۴۵۱۴۴

11 April 2018

This is while Tehran stocks registered a 25% growth during the same period.

Tehran Stock Exchange's main index TEDPIX scored 19,060 points or 24.7% during the year to close at 96.290. Iran Fara Bourse's benchmark index IFX also gathered 222 points or 25% last year to stand at 1,097.

A mutual fund is an investment containing a pool of different shares of individual stocks and or bonds, which are specifically chosen by the fund manager or management team. The price of a mutual fund is set at the end of each trading day and all mutual funds have expenses, including commissions, redemption fees and operational expenses, Financial Tribune reported.

ETFs are also very similar, but can be traded during the trading day and their prices are determined by investor demand at any given time. They also usually have lower expenses and are hit with less tax.

As for different types of funds, diversified investment funds had the highest average returns of about 21% for the year. They were followed by fixed-income funds and equity funds with about 20% and 16% respectively.

The market's 17 exchange-traded funds on TSE and IFB also posted an average of 19.22% in returns.

Diversified funds are the smallest of the bunch in terms of net asset value of 8.71 trillion rials ($207.45 million). Fixed-incomes are the largest, as they manage 1.43 quadrillion rials ($34.09 billion), and equity funds stand in the middle with 22.49 trillion rials ($535.57 million).

The funds' net asset value stood at 1.46 quadrillion rials ($34.84 billion) by the end of the fiscal 2017-18, accounting for 10% of total liquidity in Iranian markets.

Rankings shift slightly if the funds' performance is considered since their inception. Equity funds jump to the top with an average of 236.9%, followed by diversified funds with 157.05% and fixed-incomes with 80.73% in returns.

Ava Servat Kian's equity fund outperformed all other funds by a large margin and its annual returns stood at 62%. The small equity fund manages a total of 172.86 billion rials ($4.1 million).

Over 48% of Kian's portfolio is made up of the market's top five stocks and 48.3% are invested in other equities. Chemicals, metal ore extraction, base metals, engineering services and auto production are the fund's primary investment targets respectively.

The two next top-gaining funds were also among equity-focused ones, as other funds still struggled to cross the 35% mark.

The 37.5-billion-rial ($892.9 million) Nikan Pars Mutual Equity Fund posted returns reaching 47.2%. And the next small fund was Padash Sarmayeh Pars, with a net asset value of 43.99 billion rials ($1.04 million) and total annual returns of 42%.

Yet, with bigger risks also come bigger potential losses. Some of the year's worst performers were also among equity funds.

Yekom Saham Gostaran Shargh lost 20.16% of its net asset value during the year to be placed last among all funds. Eghtesad Novin Bank's Mutual Fund came next with 12.1% of losses, followed by Pardis Mutual Fund with 7.25% downtick for the year.