mutual fund is a professionally managed investment fund that gathers money from many investors in order to purchase securities. Mutual funds have both advantages and disadvantages compared to direct investing in individual securities. Nowadays mutual funds play an important role in household economy, most notably in retirement planning.

In Iran, activities of mutual funds have begun after the passage of stock market law in 2006. The number of funds have increased during recent years and by the end of 1394 (Persian Calendar), assets and equities managed by different funds surpass 626 thousand billion Rials.

In terms of structure, we have 3 main categories of funds which are: Fixed Income Funds, Stock Funds and Hybrid Funds. There are some other categories such as passive funds versus actively managed funds, Exchange-Traded Funds (ETF) and Housing and Building Funds which have a share of 2.6% in total. In this article, we focus on main categories and related statistics of them.

Fixed Income Mutual Funds:

These funds invest their equities mainly in Sukuk (such as Sukuk Al-Musharakah, Islamic Treasury Bonds, Certificates of Deposit and etc.) and other fixed income bonds. In Iran, these funds have the obligatory to invest at least 70% of their money in these bonds, which means that they have the right to invest up to 30% of their equities in stocks. Based on the Stock Exchange Organization`s report, there are 48 different fixed income funds in Iran which in total their value is 604,979 billion Rials.

Stock Funds:

In Iran, Stock funds are the funds that invest 70% of their assets in the stocks of Tehran Stock Exchange or Iran Fara Bourse. Based on funds` sizes, there are 2 types of stock funds. In small stock funds, the range of their units can be between 5,000 to 50,000, While in big funds, the range of their units is between 50,000 to 500,000. Based on the Stock Exchange Organization`s reports, there are 94 stock funds in Iran which worth 20,163 billion Rials in total.

Hybrid Funds:

Hybrid funds have to invest at least 40% of their assets in fixed income bonds and at least 40% in stocks, based on the quorum laws in SEO. Based on the SEO`s reports, we have 15 Hybrid funds in Iran which hold 1245 billion Rials assets under their control.

 

An overview of these funds has been provided In the following table:

Category Total Value Number of Investors Funds asset Mixture (%) Average Return %
Stocks & Rights Fixed Income Bonds Deposits & Certificate of Deposits Cash Other
Fixed Income 604,978,530 794,430 2 18 79 0 1 22.83
Hybrid 1,245,468 7,852 64 22 11 0 3 24.77
Stock 20,162,543 14,942 89 4 2 1 5 30
Total 626,386,541 817.224 5 18 76 0 1

*all the statistics is from the SEO reports by the end of 1394(Persian Calendar).