FUND VALUES STABLE DESPITE VOLATILE MARKETS
Total funds under management and administration fell by £1 billion (0.5%) over the quarter ended 31 December 2008 to £200.4 billion. For the year since 31 December 2007, values increased by £22.2 billion, an increase of 12.5%.
Within these totals, Guernsey domiciled open-ended funds fell by £2.1 billion (3.2%) over the quarter to £63.6 billion. This represents a decrease of £5.6 billion (8.1%) over the year since 31 December 2007. The decrease in value over the quarter results mainly from the adverse performance of global markets during the final quarter of 2008, with resultant net outflows from investment funds as investors redeemed their holdings.
The closed-end fund sector saw growth, with increases of £5.6 billion (6.5%) over the quarter and £15.1 billion (19.8%) over the year since 31 December 2007, to reach £91.5 billion, a new record. Some elements of the closed-end fund sector, especially those holding unquoted investments, may be insulated from quoted market movements.
Non-Guernsey schemes, for which some aspect of management or administration is carried out in the Bailiwick, decreased by £4.5 billion (9%) over the quarter to leave their value at £45.3 billion. This figure is an increase of £12.7 billion (39%) over the year since 31 December 2007. The decrease in net asset value over the final quarter of 2008 results mainly from the on-going adverse performance of the global hedge fund sector during this quarter.
It has to be recognised that exchange rate volatility, particularly in the latter half of the year, has made interpretation of value changes quite challenging. In earlier periods, the relative strength of Sterling against other currencies has tended to deflate the reported growth in values of funds with non-Sterling assets. In the latter half of 2008, the decline of Sterling against the US Dollar and Euro, and the subsequent recovery against the US Dollar has made the identification of underlying trends difficult to analyse. In general, as elsewhere in the world, funds have experienced reductions in portfolio values and, in the open-ended sector, have felt the impact of redemptions. These effects have been mitigated by exchange rate variations.
Peter Moffatt, Director of Investment Business at the Guernsey Financial Services Commission, said:
“Guernsey is not immune from the continuing volatility of global markets which has affected investment funds everywhere. Nonetheless these figures demonstrate the resilience of Guernsey’s investment fund sector”.
The detailed statistics are available here (PDF document)
Peter Moffatt, Director of Investment Business
Tel: (01481) 712706 Fax: (01481) 713361
International dialling code: +44 1481