Value of risk (VaR) of investment funds in Albania.

In this study we have analyzed the investment funds in Albania, represented by: Raiffeisen Invest Euro, Raiffeisen Prestige, and Credins Invest. Two of the funds are in the local currency ALL, while the other in the Euro. The Monte Carlo simulations (log-normal distribution of return) were used to forecast the risk return of these fund. The stochastic process techniques and the VaR model are applied to each finding of the study. Investment funds in Albania, as a new investment alternative, are not generating attractive returns for different investors. In addition to the fact that investment funds are in the start-up phase it results that their quotes have a high risk and low return. This indicates the lack of diversification and the high operating costs of the fund. If we compare the interest rates of bank deposits (monthly) with the average return on funds, only Credins Invest has a higher monthly return (moderately) than bank deposits. Bank deposits have almost zero risk for investors, as a result, Albanian investors will be uninterested in investing in these investment funds in the short term. [ABSTRACT FROM AUTHOR]