The total assets of the mutual funds on the Romanian market went up 57% in Q1, 2004 compared with the beginning of the year, and the funds started yielding real gains month by month. However, the Romanian fund industry is still on a par with that in Bangladesh or Sri Lanka.
The mutual fund assets came to 1,858bn ROL (45.6 million euros) at the end of March, up from the 1,180bn ROL at the end of last year. Even though the substantial increase in assets is no longer a general trend among funds and the number of investors has gone down by approximately 2,000, the managers are moderately optimistic and say the mutual fund market could start coming out into the light.
The two funds to have seen the highest asset growths by far are Simfonia 1 and DePfa Money Market. Simfonia 1, a monetary fund, is managed by SG Asset Management of BRD (Romanian Development Bank). "The asset growth was due to the repositioning of the fund on the market as a cash management instrument, therefore successfully attracting many small and medium-sized enterprises as investors," Dan Nicu, head of the management company, says. The number of corporate investors in the fund was upwards of 300 and the fund's assets were worth 530bn ROL ($15.6 million).
The number of corporate investors went up for other funds, as well, and managers say it would normally be time for individuals to invest in funds. "We are glad corporate clients have started to turn to mutual funds. I believe this is a sign the negative perception individuals have of mutual funds will start to heal little by little," Doru Tiberiu, BCR Asset Management director says.
DePfa Money Market, the other fund that saw a strong growth in assets is a venture capital fund managed in Romania by a company held by German DePfa Investment Bank, which holds almost all the 686bn ROL ($20 million) assets of the fund. The fund, which has only eight investors risks losing its license in June if it does not successfully attract the rest up to 50 by then.
The average yield of the mutual funds amounted to 1.6% in March against a 0.5% inflationary rate. Even though the gap between gains and inflation can be explained by the high real interests operated or by the Stock Exchange surge, the main growth factor is the cleansing process the mutual fund market has gone through in the last few months.
The National Securities Commission (CNVM) decided to withdraw the license of several funds because of low assets, which also meant small gains for investors because of the management expenses paid with their money. On the other hand, the managers of other mutual funds decided to merge them.
vlad.nicolaescu@zf.ro
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