Downturn blamed for fall in funds

The financial Services Commission said the fall was not unexpected

A drop in the value of funds invested in Guernsey has been blamed on the economic downturn.

The funds fell by nearly £6bn during the three months to September, according to the island's financial services commission.

During the same period domiciled open-ended funds in Guernsey dropped by £8bn to £65.7bn - a fall of more than 10%.

However the commission said it was better news for the island's closed-ended funds which grew by £1.1bn.

A closed-end fund has a fixed number of shares and a close date at which the fund's value is distributed amongst shareholders.

Shares in open-ended funds can be bought and sold at any time.

The commission said the downward trend was not unexpected because of the performance of global markets during the period.

In a bid to stimulate the UK economy, the Bank of England has cut interest rates by 1.5% - bringing the base rate down to 3%.