Monetary funds are no longer attractive to individuals, a fact even the funds' managers admit.
If the current market conditions do not change, monetary funds' yields are likely to reach 6% at the highest this year, while on the market, under similar liquidity conditions, some banks are offering an annual interest of as much as 8%.
Monetary funds' yield after the first three quarters of the year ranged between 4-4.5%, reads the report presented by the National Union of Collective Placement Bodies (UNOPC).
Amid the ever-fiercer competition on the banking market, some banks have started creating current accounts for individuals that come with an interest rate close to the one of a time deposit. Individuals are not rushing to invest in these financial instruments.
According to the same report, the sums invested by individuals in the total net assets of these funds after the first nine months accounted for less than 1% in the case of Bancpost Plus, managed by EFG Eurobank Mutual Funds Management Romania investment manager, held by Eurobank Ergasias and Bancpost SA. The fund with the largest share of individual investors in the total, 22.5%, is Simfonia I, a monetary fund managed by SAI SG Asset Management, the Romanian unit of Societe Generale Asset Management Paris.
Stabilo, a bond and fixed-income instruments fund managed by Pioneer Asset Management SAI, the asset management arm of Italy's UniCredito financial group, posted a 4.5% fund unit yield in the first nine months of this year.
Updating this figure, in late 2006 the fund is likely to bring its customers a 6% yield.
"Stabilo fund is not successful with retail investors. However, because of the lack of investment alternatives on the domestic market and of the higher liquidity it offers, the fund has become a treasury instrument for legal entities," explains Florin Dolea, Pioneer Asset Management CEO.
Stabilo's net assets are 89.24% held by legal entities. On September 30, the fund reported a six-fold increase in its net assets, due to the fact that a foreign institutional investor decided to re-enter the fund. After this happened, 80% of financial resources were placed in banking deposits, 12% in bonds and 1% in T-bills.
The lack of a government bond issue for more than a year has not left monetary funds with many investment alternatives.
Most resources drawn from investors were bank deposits. Yields brought by monetary funds cannot be higher than banking interests, with the funds being forced to charge investors a management fee.
However, monetary fund managers foresee a better performance for these funds in case the NBR announces an interest rate hike.
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