engleski

Is there a connection between investment funds´ net assets and stock indices? - Evidence from the Croatian capital market

Investment funds are becoming a more and more significant investing opportunity for investors at Croatian capital markets. Therefore, the Croatian Financial Services Supervisory Agency imposed an adequate regulatory framework on investment funds in Croatia based on those of other comparable EU counties. There are two basic types of investment funds in Croatia and these are open-ended investment funds with public offering (UCITS) and alternative investment funds (AIF), each with specific investment strategy and objectives. Open-ended investment funds with public offering raise capital through public offering of their units and invest in liquid financial assets and money market instruments and usually are less risky than alternative investment funds. Alternative investment funds raise capital through a public or private offering and invest this capital in different types of assets in accordance with the legal provisions and predefined investment strategy and objectives. Since the majority of investment funds in Croatia invest in financial instruments, this paper aims to identify the correlation between investment funds’ net assets and stock indices at the Zagreb Stock Exchange. Investment funds’ net assets depend on the market value of the financial instruments that constitute the investment fund’s portfolio. Due to that, a positive correlation is expected between investment funds’ net assets and stock indices. According to the research results, there is a positive correlation between the debt indices and investment funds’ net assets value, but the correlation between the equity indices and investment funds’ net assets value is mostly negative. The research is covering the period from December 2013 to June 2016.

investment funds ; net assets ; stock indices ; Croatian capital markets

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