All 17 local investment funds in Kuwait ended October with negative returns. Losses ranged from 2.36% to 8.81% for the worst-performing fund, and none of them posted a positive return for the month, according to Al-Eqtisadyah.
The funds invest in leading and premier companies, growth and dividend stocks, and the most solvent defensive companies, so their performance tracks those stocks as the market rises or falls. The decline also hit funds run by managers that hold awards and ratings.
The weakness was not limited to October. Most funds have been negative since the start of the year, and the few with positive returns have barely made any gains.
The report cited several reasons for the decline: weak liquidity at the funds, small and limited capital (some funds have capital of KWD 5 million), and holdings shared across several funds, all of which fell sharply.
The report also said the funds are shrinking as a source of capital and that no new funds with fresh ideas have been launched for years. As a result, they have gradually lost their influence as institutional traders, while speculators have gained ground. Funds are now counting on a market rebound, better company results and good year-end dividends.
