Local and foreign mutual funds operating in Bulgaria sat on 897 million leva in assets at end-June, up 17 per cent year-on-year but 24.7 per cent down on end-2007, data of the central bank showed. Locally-owned mutual funds had a market share of nearly 70 per cent at the end of June.

Further withdrawals coupled with the stock market rout pushed the domestic mutual fund assets under the 800 million leva mark in July, Dnevnik estimates, based on data provided by the Bulgarian association of asset managers and the funds themselves, show.

Despite weathering their worst ever slump in the first half of 2008, mutual funds targeting equities remain the top choice for investors, with a market share of 56 per cent. They are followed by the balanced schemes which posted a 23 per cent decline in assets over the review period.

The mutual funds lost ground to bank deposits in the first half of 2008. Due to the stock market correction, fund withdrawals and the deposit rate growth, the value of mutual fund assets as a share of the banks' deposit portfolio fell to 2.5 per cent from 3.5 per cent, central bank data showed.

Bulgarian households are investing less in the mutual fund market. Their share of the customer base is down to 35.7 per cent from 53 per cent at the end of 2007.

At the same time, mutual fund investments made by pension funds and insurance companies rose in the first half of this year both percentage-wise and in absolute terms. Those two types of clients had invested 147 million leva in mutual fund products by the end of June, up from 59 million leva at the end of 2007.

The customer base of the non-native funds remained mostly unchanged in the first half of the year. The share of household investments fell fractionally to 39.2 per cent of mutual fund assets, while those of pension and insurance companies edged up to 53.6 per cent.

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