Following falls in funds under management over the second and third quarters, reflecting volatile international stock markets, particularly in Asia and Russia, the last quarter reversed the trend with the value of assets under management increasing by just under £ 1 billion (6.6%) to reach £15. 7 billion at 31 December 1998.

The total number of funds (393), closed-ended funds (202), investment pools (53 8), funds listed on international stock exchanges (109) and non-Guernsey schemes serviced from Guernsey (117) also reached new highs at year-end.

During the year 21 fund sponsors not previously represented launched new products and Guernsey is now the chosen domicile for international fund sponsors from 37 countries, the latest addition being Iceland.

The initiative to introduce innovative legislation for protected cell companies (1997) and limited partnerships (1996) continued to bear fruit for the fund sector, with 16 authorised open-ended schemes constituted as protected cell companies at 31 December 1998 (1997, 7) and 40 closed- ended schemes established as limited partnerships (1997, 33).

With 33 fund applications in the pipeline, and the recent announcement that two Guernsey authorised funds had obtained consent from the South African Financial Services Board to be marketed to the public in South Africa, prospects for 1999 are encouraging.

This report summarises and analyses the fund industry's statistical returns for the last quarter of 1998.