In Fitch's opinion the Costa Rican financial investment funds (FIF) industry displays a constant need to reorganize its portfolios in order to remain in the market as an alternative investment option.
This reorganization of Costa Rica's FIFs is to some extent according to the currency they are held in (investments may move between currencies depending on the local exchange rate and international factors). However, to a greater extent the restructuring occurs in accordance with changing investor objectives and interest rate forecasts.
Local assets are channeled through FIFs by investors seeking liquidity, in particular in money market funds, which look set to become the industry's biggest sector.
Financial investment funds have managed to come out the crisis without losing any products, demonstrating that it is an industry that gives investors security.
Despite the international financial crisis, assets have grown by 8% in 2010 and the number of investors increased 10% to 33.432 customer accounts.
Among other options, stock funds won over many investors reappearing as an investment option with over 200 investors. Also open Growth Funds increased 12%, Megafunds with an 11% increase and Money Markets with 12%.
In Costa Rica, investment funds grew 16% in 2009, in spite of losing almost 10% of their investors.
During the past financial crisis, the Costa Rican market turned out to be more stable than international markets, making it a relatively safer place for storing capital. Because of this, assets managed by investment funds grew to $2.48 billion.
In Costa Rica, 55% of the total in investment funds is in extreme liquidity instruments.
The fear caused by the financial crisis has prompted investors to abandon growth and income investment funds which typically offer better returns and put their money in highly liquid, low return funds, where the money can be withdrawn in less than 24 hours.
Measures oblige firms to have liquid assets ready to meet obligations.
Last week the General Securities Office approved a change in articles 34, 61 and 67 of its general rules relating to administrative companies and investment funds.
The goal is to create better management of the maturity dates of assets held by the long-term open funds.
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