Addressing Bank of Valletta employees at Valletta Fund Management's annual seminar for the financial year 2008/2009, VFM general manager Peter Perotti said that a report by the European Funds Association showed investors across Europe had started to move their cash back into funds.
He said that a combination of positive developments, such as all-time low short-term interest rates, the potential for stock price appreciation and improving prospects of the world economy were likely to continue to boost the demand for investment funds.
Mr Perotti commented on how the global financial crisis experienced during the year was one of the most serious financial market crisis in history, with massive losses recorded in stock markets, the bankruptcy of Lehman Brothers and a number of international banks facing operating difficulties.
"Investor sentiment was at its lowest, and while it is normal for investors to feel unsure during such periods, it is equally important to remember that bear markets are as natural as bull markets and that during such situations there are alternative investment solutions aimed at helping investors regain control over their portfolio."
He emphasised the importance of investing in a regular manner and said that in the light of the current market conditions, available plans provide investors with an excellent way to start planning for their future by minimising the downside of the markets over years to come.
He went on to explain that this strategy of price averaging does not try to time markets; instead it reduces the risk of investing a large amount at an unfavourable time, by spreading investments over an extended period of time across different market cycles.
During the seminar, those present could participate in a question-and- answer forum on international stock markets with Mike Pinggera, head of multi-asset class solutions within Insight Investment Management (Global) Ltd.
Mr Pinggera said the immediate outlook for the financial system has improved markedly since April. "Financial markets have rebounded, emerging market risks have eased, banks have raised capital and wholesale funding markets have reopened. However, credit channels are still impaired and the economic recovery is likely to be slow. The financial world is showing signs of good activity and although investor confidence is back to acceptable levels, one should consider recovery as a process and not an event."
The seminar was also addressed by Mark Vella, head of marketing at VFM, who analysed the performance of VFM's range of investment funds and the impact that the recent market crisis had on the performance of the funds, and by David Pace Ross from BoV, who gave a presentation on the local market quarterly highlights. These seminars are organised by VFM on a quarterly basis to keep BoV licensed sales personnel abreast with developments in the local and international market as well as with the performance of the VFM's range of funds.
For more information, e-mail infovfm@bov.com, visit www.vfm.com.mt or call 2122 7311.