Mutual funds 'to become more popular'
Investors will prefer mutual funds over other strategies due to the current financial turmoil, a new report claims.According to Strategic Insight, the relative transparency of the instruments, as well as the diversity of their investments, will boost their popularity.This comes despite the recent falls on equities markets, caused by the ongoing credit crisis.In one week earlier this month, the flagship FTSE 100 index dropped by 21 per cent, wiping billions off the value of investment portfolios.Daniel Enskat, head of global consulting at Strategic Insight and the author of the report, commented: "Despite lower sales and a flight to safety in the near-term, the global financial crisis is an opportunity for the many benefits of mutual funds including transparency, liquidity and diversification - to become even more accepted worldwide."He added: "Uncertainty will only make mutual funds look better relative to derivatives-based structured products, hedge funds, and direct stock investing."
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