(Investment Business Update Special November 1996)
The third quarter statistics have just been published and they indicate that Guernsey funds are stable following a rather volatile third quarter. The net asset value ("NAV") of collective investment funds under management in Guernsey were slightly down in the third quarter, largely due to the effects of currency exchange rates at the end of the period and a decline in equity market performance in some emerging economies. Funds under management totalled £14.6 billion, down £151 million (1.0%) from the previous quarter. The overall total number of funds has returned to the level set at the end of March this year (335) but the underlying value of funds has increased 5.1% since that period.
There is very encouraging news in the open-ended sector in that although the number of authorised funds has been reduced by a net figure of five funds, the departure of some eight retail funds and the suspension of two further funds (at their managers' request) has been countered by five new fund authorisations and net new investment of £358 million in the existing funds. The overall "NAV" of open-ended funds remains relatively unchanged at the end of the third quarter, standing at £9.8 billion (down 0.1% from the last quarter). Fund managers continue to take advantage of the economies of scale and have increased the number of new classes of umbrella funds by introducing a further three sub-classes; in consequence the total number of sub-classes has reached a new high of 459.
In the closed-ended sector assets under management fell by approximately 2.8% to £4.9 billion (down £140 million from the previous quarter). Approximately 53% of Guernsey's closed-ended funds are US Dollar denominated and a combination of USD exchange rates against a basket of currencies and the underlying value of emerging markets, particularly equities in India, South America and the Far East, has had a significant impact on the third quarter statistics. The third quarter saw two new promoters for Guernsey funds - a South African and a Spanish promoter. Three new funds were granted consent in the quarter, although the total number of closed-end funds has increased by two as a result of one fund liquidation.
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