While the trend to cut fees on the mutual fund market is in full bloom, some managers think a higher fee can be a good thing. The Intercapital Fund, which currently charges zero redemption fee, will charge 2.5% if the repurchase is done in the first six months of the investment, in case the initiative is approved by the National Securities Commission (CNVM).
"We intend to introduce a redemption fee for Intercapital Fund to discourage speculative investments," Iulian Panait, Certinvest analyst said. The fund invests in listed securities mainly.
The investors were practically allowed to buy fund shares and have them repurchased the next day free of charge. The stock market funds may see share growth of 1-2% from one day to another. Containing speculations would allow the fund to have a less liquid investment structure and a greater stability of the asset value, which usually translates into higher gains. The fund would charge 0.5% redemption fee for the investments older than six months. "This is less than what we pay to the broker to liquidate an investment in shares," Panait says. The fund logged 23.4% growth last year against an annual inflation of 14.1%.
Many mutual funds on the Romanian market have operated substantial redemption or management fee cuts over the last few months. The reason why they did this was to boost the investors' interest amid lower interests and inflation, that make fees harder to bear.
As for the other two funds it manages, Certinvest will, however, cut the fees. The redemption fees for Capital Plus, a fund investing in various instruments, which currently range between 8% and 1% depending on the investment duration are to be cut down to half. The 0.2% fee of the Tezaur monetary fund is to be dropped, and the investors will only have to pay the redemption costs (50,000 ROL for banking transfer or 0.5% for payment in cash).
Another investment management company, SIRA, which administrates Fondul pentru Comert Exterior (Foreign Trade Fund), plans to lower redemption fees, as well. This fund is the only one on the market that actually charges a fee when selling its shares. SIRA's representatives did not care to reveal the amount of the new fees, which were sent to CNVM for approval.
SG Asset Management, the company that manages BRD's investments, last week announced the management fee for the only fund it runs, Simfonia 1, would be halved to 0.25% a month. The company shed the redemption fee last year, which would previously go as high as 4% depending on how old the investment was.
vlad.nicolaescu@zf.ro
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