The rebound by the Athens Stock Exchange (ASE) in 2003 after three years of a downturn signaled the return to profitability of equity and balanced mutual funds, with some of them performing outstandingly. This rebound, however, on the whole failed to dispel the lack of investor confidence and minimal amounts were placed on equity funds. By contrast, money market funds managed to attract significant new capital, despite a weak performance due to the sharp fall in interest rates in recent years. Banks appear to practically use money market funds – which offer slightly higher returns than the traditional deposit products – as a lure, hoping that investors will at some point transfer part of the capital invested to bond and, particularly, equity funds. The number of shares acquired in money market funds in 2003 rose by about 40 percent. The year was also particularly good for bond funds, whose number of shares rose by about 30 percent, while the average performance of the category (on the basis of closing prices of December 29) was 2.53 percent. Dollar woes The sharp rise in the value of the euro against the US dollar in 2003 meant that those who invested in dollar-based funds faced a minefield, receiving a practical reminder of the currency risks involved. The low-risk bond and money market funds that invested in the US market ended up with negative performances, approaching 15 percent. A weaker US currency also meant a trimming of the gains of funds investing in American stocks. Despite the «dollar mine» and the impressive performance of Greek equity funds compared to foreign ones in the category, domestic investors remained unmoved. The assets of equity funds investing abroad (international and foreign) more than doubled last year, an increase almost exclusively due to the inflows of new capital. By contrast, the assets of domestic funds remained bogged down and their performance gains were mostly due to the higher market values of the stocks they invested in. The average performance of the 68 domestic equity funds was 21.06 percent, slightly lower than that of the ASE general index. One fund, Delos Financial Services, gained more than 40 percent on the back of strong bank stock gains, while the performance of the top 20 in the category exceeded 26 percent. The top five were mainly funds with low assets which effectively followed market trends, tapping the flexibility of their size. HSBC Growth Fund is the only one of the five with assets of more than 100 million euros. 2003 was also a good year for the high-asset funds of Alpha Bank. Most balanced funds were among the winners, with the average performance of the 25 that were active on January 1, 2003 standing at 11.61 percent. The funds of Bank of Cyprus, Alpha Bank, Citibank and Proton Bank stood out and the top 13 performed above 10 percent. Nine of the 30 bond funds performed above 3 percent, led by those of Allianz, Omega and Alpha banks. Finally, the 34 money market funds had an average performance of 2.16 percent.