Record 2009 helps mutual funds regain lost credibility

2009 brought a revival of mutual funds, which, by tripling their volume of assets to the record threshold of over 3bn RON (720m euros) and doubling the number of investors, have regained the reputation and visibility they had lost in the wake of late '90s bankruptcies.
The mutual fund market is poised to end its best year on record, with net assets of above 3bn RON (720m euros) from over 160,000 investors. Compared with late 2008, when market assets stood at 940m RON (235m euros) from almost 91,000 investors, the leap is huge, beyond the most upbeat expectations of market players.
Even so, the number of investors in mutual funds has not reached, yet, the record high level of 1999. "(...) The presence of internationally renowned financial-banking groups in the asset management industry was decisive in its regaining its credibility," said Drago[ Neac[u, chairman of Erste Asset Management, the biggest fund manager with assets under management worth above 1.4bn RON (330m euros).
The leap mutual funds have taken this year is the more important as it occurred after the unprecedented corrections the capital market registered in 2008. Moreover, funds' performance was registered in a hostile context marked by the first year of economic downturn after a decade of uninterrupted growth, but also by the high volatility of the Stock Exchange.
The winners were primarily managers that are part of financial-banking groups. Thus, owing to the banking sales network, funds with a conservative risk profile posted an unprecedented asset growth, of as much as 380%, in the first 11 months of 2009. Banking managers came to control over 90% in the industry's assets.
For independent managers, 2009 did not bring major changes from previous years in terms of assets and number of investors.
The most vulnerable to the crisis were "young" managers, launched last summer. In other situations, managers gave up products. There were, however, managers that saw the crisis as an opportunity and added new products to their portfolios.