Investors Preferred Mutual Funds in 2020

In 2020, investors preferred mutual funds. The size of hedge funds grew by 65 percent.

According to the statement made by the Corporate Governance Association of Turkey (TKYD), although it was not possible to escape from the negativities due to the coronavirus epidemic in the first quarter of 2020, the sector in general achieved rapid recovery after the first quarter. TEFAS also showed a record increase in transaction volume that mutual funds became the favorite of investors in 2020. Of the 84 institutions that have made total transactions in TEFAS in 2020, 43 are brokerage houses, 21 banks, 16 portfolio management companies and 4 participation banks. In 2020, TEFAS transaction volume increased 3 times compared to the previous year.   Size of Hedge Funds Grew 65 Percent In the report; Mutual funds, Securities Investment Funds, Hedge Funds, Real Estate Investment Funds and Venture Capital Investment Funds were divided into main categories and analyzed. Accordingly, portfolio size of securities investment funds increased to 95 billion TL in 2020. Real estate and venture capital investment funds, which have a history of about 4 years, reached 11 billion TL by the end of 2020. The size of the hedge funds, amounting to 21.6 billion TL at the end of 2019, grew by approximately 65 percent at the end of 2020 and reached 35.6 billion TL. It was observed that the weighted average net returns of securities and hedge funds were above the CPI and deposit interest in all examination periods. Equity mutual funds have earned their investors approximately 37 points more than the BIST 100 Price Index in the last year. When historical yields were analyzed, it was seen that share funds achieved higher returns than the BIST 100 Index, which is the benchmark for successful asset management. Equity mutual funds have earned approximately 109 points above the BIST 100 Price Index in the last 3 years and approximately 166 points above the last 5 years. When the share (success rate) of the funds exceeding the return of the comparison criterion in the total funds was analyzed, it was seen that a 69 percent success rate was achieved in 2020. In the last 5 years, a cumulative weighted net return of 140 percent was seen on average in securities investment funds. The average return for the 3-year period was 79 percent, and in the last year, this return was 22 percent. It was noteworthy that the said returns were above both inflation and deposit rates. In recent years, when deposit rates have declined, hedge funds, which are preferred by some investors in their search for alternative investment instruments, have yielded 215 percent in the last 5 years, 120 percent in the last 3 years and 32 percent in the last year. Real estate and venture capital funds, which started to be established at the end of 2016, have brought 106 percent and 24 percent, respectively, to their investors in the last year. When the securities funds were divided into categories and analyzed in detail, it was observed that the highest return in 5-year and 3-year periods belonged to foreign stock funds. In the last year, participation funds have been the most profitable. Gold funds followed him. In the last 1-year review period, the weighted average net returns of all securities mutual fund categories except money market funds were recorded above the CPI and deposit interest.       Source: Economist