"Investors trust the lek more"/ Foreign currency funds grow, but the investment market is dominated by those in the local currency
The investment fund market in Albania continues to expand, however, recent data show a different dynamic between funds operating in lek and those in foreign currency. In the first half of this year, 13 open-end funds with public offering were active, with 7 funds operating in foreign currency, mainly euros, while the others operated in the local currency, lek.
The net assets of foreign currency funds reached 59.2 million euros (5.806 billion lek), accounting for only 9.22% of the market, while funds in lek recorded 57.1 billion lek, or 90.78% of the total. This ratio clearly shows the dominance of funds in the local currency, although foreign currency funds remain an important alternative for investors seeking to diversify savings and protect themselves from the risk of domestic inflation.
Although the value of foreign currency funds' assets has increased slightly compared to the end of 2024, their market share has fallen from 9.74% at the end of last year to 9.22% in mid-2025. This means that their growth rate has been lower compared to funds in lek.
For individual investors, these figures mean that the choice between a lek-denominated fund and a foreign currency-denominated fund is not only a matter of yield, but also of exchange rate exposure. Lek-denominated funds offer less risk for those whose income and expenses are mainly in the local currency, while euro-denominated funds may be advantageous for those who want to diversify their savings or have foreign currency income.
The trend towards lek funds also reflects an increase in confidence in the national currency, while foreign currency funds remain an alternative for investors seeking long-term stability against local currency fluctuations.
Citizens who do not have sufficient knowledge of how to individually invest in treasury bills, bonds and stocks or do not want to be directly involved in this process usually turn to investment funds, which invest their clients' money in government securities and guarantee a secure return on investment.
Headline: Foreign currency investment funds have seen an increase in activity this year, but their impact on the market has been shrinking, while funds in lek are gaining more and more ground, reflecting increased confidence in the local currency and more cautious investor choices.
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