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Mutual Funds - 1998 (1st Semester)


III - FUNDS INDUSTRY VERSUS FINANCE SYSTEM

Traditionally, Portuguese investors have preferred bank deposits, as a saving instrument. However the importance of mutual funds has registered a positive evolution. By the end of June 1998 they represented about 31.4% of total bank deposits of individuals and companies.


Very popular amongst the common investor, long-term redeemable treasury bonds, known in Portugal as Certificados de Aforro, have been registering a similar amount to the mutual fund’s assets. By the end of June 1998, mutual funds represented about 165% of total applications in Certificados de Aforro.


Funds vs. Certificados de aforro
( PTE: 10^9 )


The importance of mutual funds in the Portuguese capital market can be measured by the market capitalization incorporated in the portfolios.


Funds vs. Market Capitalization


The importance of mutual funds in the market capitalization is stronger in bonds. The peak was achieved in 1997 when portfolio investment in bonds reached about 14% of total market capitalization. Portfolio investment in shares represents a smaller component of total market capitalization. However the weight of shares in total market capitalization grew more than threefold in the last five years.