The yields of over 50% provided by some of the Romanian mutual funds in the last 12 months have been particularly good for Romanian investors, but have also drawn the attention of investors from outside the country. With foreign investment on the Bucharest Stock Exchange (BSE) having been rapidly increasing over the last two years, foreign investors are beginning to look at investments in Romanian mutual funds, as well.
As the ROL/USD exchange rate has remained practically unchanged for over a year, a 50% yield in ROL also means 50% in dollar terms. Certain fund administrators are even thinking up ways to sell fund shares abroad.
"We've received several offers for partnerships with advisory firms from Germany and Austria that want to point their investors in the direction of the funds we manage," says Eugen Voicu, chief executive of Certinvest, a company that manages four mutual funds. He says the foreigners will be able to send the money and the subscription application to the company exactly like Romanian investors do.
Certinvest wants to launch two funds whose shares are dollar and euro denominated in the next two months. Voicu says the funds will primarily target Romanian investors, but investing in such funds will also be more attractive for foreigners. This is because, unlike funds denominated in ROL, they will no longer have to exchange their cash for ROL.
The markets in the developed countries have provided lower and lower yields over the last few years because of interest rates and stock market decline. Under the circumstances, some investors have gone in search of opportunities on markets whose currencies are appreciating.
There are a number of investment funds on the foreign markets that include Romania among their targets. The advantage Romanian funds have as far as foreigners are concerned is that they are closer to the market they invest on and can usually make better informed decisions about their investments.
The yields in dollars of the Romanian mutual funds over the first seven months of this year reached 37%, due to the increase in the quotes of the stocks listed on the capital market and to the high interest rates for investments in ROL.
A company belonging to the German DePfa Bank has been managing a fund for well over a year already, whose assets are in excess of 21 million euros, and whose main investor is DePfa itself. The foreign investors' interest in the Romanian mutual fund industry is growing. Certinvest was acquired by the Romanian-American Enterprise Fund last year; the German HVB Bank established an investment management company in Romania; and the Slovenian KD Group has already launched its first mutual fund managed in Romania and investing on this market.
vlad.nicolaescu@zf.ro
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