Bahrain’s mutual fund industry increased by more than 100 per cent for the 12 months to the end of June as managed money rose to more than $20 billion.

The increase in business is a reflection of the regulatory framework in the kingdom and the fact that it is conducive to business and the most advanced, according to Securities and Investment Company (SICO) head of asset management Shakeel Sarwar.

He was speaking after the Central bank of Bahrain (CBB) released figures showing that mutual funds in Bahrain increased by 115pc to $20.14bn in the 12 months to the end of June.

’This growth is down to the fact that fund managers see Bahrain as being light years ahead of the rest of the region when it comes to the regulation of mutual funds,’ said Sarwar.

’Bahrain is the preferred location for registration by both international funds as well as regional funds from the UAE and Kuwait because of the regulations which make it the most advanced and investor-friendly environment.’

The number of funds registered and authorised with the CBB rose to 2,636 at the end of June this year and the net asset value (NAV) of those funds totalled $20.14bn.

In comparison, the number of registered funds as at June last year was 2,374, with assets under management totaling $9.37bn.

’The growth in the number of funds and assets under management is indeed a reflection of the demand generated by regional and international investors,’ said CBB director financial institutions supervision Mohammed Ayman Al Tajer.

Assets of foreign funds registered in Bahrain for sale rose 134pc to $13.34bn in June this year, compared with $5.69bn a year before.

The number of such funds totalled 2,502 compared with 2,266, 12 months before.

The investible assets of Bahrain-domiciled funds rose 84.5pc to $6.79bn up from $3.67bn.

The number of such funds surged by 24pc to 134 from 108.

’We are observing a growing interest from regional specialised financial institutions that are actively involved in the structuring of mutual fund products in particular,’ said Al Tajer.

’While many of these are focused on investments based in the region, they find an added value in utilising the Bahraini collective investment undertakings (CIU) regulatory framework for the establishment of their CIU investment vehicles.

’This is due to the fact that the Bahraini CIU domiciled vehicle has established a reasonably tested track record for its efficiency and suitability,’ he added.

In June last year the CBB revamped the CIU regulation, recognising at the time the importance of addressing key areas such as transparency.

This is an acknowledgement to the fact that investors are becoming more conscious of the necessity for CIU products to be transparent.

Meanwhile, the CBB continues to consult industry players on the development of the CIU regulations, as it intends in the near future to further impose a greater level of corporate governance. - TradeArabia News Service