Economy, Business And Markets

Call for Expanding Mutual Funds

Call for Expanding Mutual FundsCall for Expanding Mutual Funds

The head of the equity market has called for supporting and increasing the role of mutual funds in financial markets.

“We have to solve the problems of mutual funds, to increase indirect investment [in Iran’s equity markets],” said the chief executive of the Tehran Stock Exchange, Hassan Ghalibaf-Asl.

Mutual funds are investment vehicles that provide diversification and professional money management for the average investor.

The executive also proposed expanding the variety of mutual funds, as this could attract investors with different dispositions. There are around 150 mutual funds in Iran, most of which are equity funds.

Mutual funds are new to Iran’s financial markets and the oldest was established in 2008. They have had a very rough year due to a 20 percent drop in the TSE in the fiscal year ending March 2015.

Thus, they have had a hard time expanding business and attracting investors.

Making the case for the merits of indirect investment, Ghalibaf-Asl called mutual funds the backbone of the equity market, saying, “The reality is that in other corners of the world, mutual funds attend shareholder meetings, not non-institutional investors, and people are not entangled with [security] issuers.”

Ghalibaf-Asl called for the analysis of the equity market, as its lackluster performance has led to losses for mutual funds.