CAIRO: Despite its tendency to fluctuate, the return on investment (ROI) on mutual funds is typically higher than interest rates on bank deposits, officials from Cairo-based investment firm HC Brokerage said at a workshop this week. In 2005, the ROI on mutual funds managed by HC was 111 percent. A year later, that number fell to 13.5 percent and in 2007 it was back up to 55 percent. All the while, the average ROI on regular bank deposits ranged between 8 to 9 percent. ROI is the ratio of money gained or lost compared to the amount of money invested. In an "educational session hosted Tuesday by HC, Adel Kamel El-Waly, executive director and investment manager for the firm's asset management department, said investors who have been cautious to put money in the financial market should consider these figures. El-Waly did say that HC saw ROI on mutual funds plunge to -53 percent in 2008 amid the backlash of the global economic crisis; but while average ROI for the last five years was 23 percent for mutual funds and 29 percent for portfolios, the rate of return on bank deposits was still 8 to 9 percent. This past year was the toughest for investments managers, El-Waly said, describing it as "the worst in the last 80 years, but "it's a promising industry despite the [big] losses in one year. Small inexpert investors, he advised, should look to mutual fund certificates as opposed to diving back into the stock market. Asked whether the past five years can act as a good measure for investors looking to the coming five years - especially with all the change that the global financial market has undergone, El-Waly answered in the positive. El-Waly, who has worked in the financial sector for 17 years, said the past period is a good long-term measurement, and that the main challenge faced by investment managers is the lack of awareness among amateur investors who make up about "50 percent of the market. Educating investors is key, said officials at HC, which holds sessions every three months to address this issue. Egypt now has 54 mutual funds, according to Egyptian Investment Management Associations (EIMA), with a recent trend for the money market fund. Despite the development of Egypt's financial system over the last decade, the market still has no bonds fund, and is still missing some tools such as short-selling, which is yet to be approved by market regulators. Commenting on the recent decision to suspend the licenses of a number of brokerage firms, El-Waly said it was late in coming since some of these companies had almost no value.
