The Albanian Mutual Funds during the COVID pandemic

Abstract

The COVID-19 pandemic caused a lockdown of a global scale and subsequent enforcement of
it had an impact in the capital markets, and the Albanian mutual fund industry would not remain
an exception. Such crisis put the industry into an unprecedented stress test. This paper uses
qualitative research method to identify the challenges that were faced by the mutual fund
industry during the beginning of the pandemic. This includes the fund flow perspective,
secondary debt markets, the shifts of regulations and the behavior of investors. The conclusions
that will be drawn from this study are aimed to help capital market investors and researchers in
drawing strategies in the Albanian market during crisis times. Albania is recognized as an
emerging economy and during its ongoing stage of development, the COVID-19 pandemic
caused turbulences in the economic stability of the country. With many measures put in motion
in order to reduce the impact of the pandemic upon the population, all the sections of the
economy have been facing disruption. The capital market, likewise, was met with a lot of
challenges during this period. Although, history has shown that the Mutual Fund (MF) industry
has always bounced back significantly after taking a hit. Considering the impact of the crisis, the
regulator, Financial Supervisory Authority (FSA), closely supervised the liquidity to ensure the
mutual funds would be able to operate in stressful conditions and in the best interest of the
investor. For this study, a Qualitative research method is applied by using Histographical
research approach, regarding the past and present events that are associated with the Albanian
Mutual Fund Industry. Furthermore, data from regulator websites, company websites, business
newspapers in physical and digital forms are used in the study as well as research papers.
Moreover, data from financial statements of the Mutual Funds (MFs) has been sourced from the
websites of Asset Management Companies (AMCs).