Monday 2 February 2009

Short-term instruments find favour

It is not surprising to see that money market and fixed income funds are enjoying a good run. With equity markets in a tailspin, short-term instruments, bonds and sukuk offer relatively safe harbours in a sea of troubled assets.

Not one to miss an opportunity, fund managers are quick to jump into the fray and are looking to launch new funds focused on short and long-term debt instruments.

Indeed, 17 per cent of the funds launched last year were focused either on sukuk (seven per cent), money markets (seven per cent) or fixed income (three per cent), and that trend will only continue as banks look to attract short-term deposits and government and public corporations look for more debt funding going forward.

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