More and more mutual funds have been turning to the Sibiu Monetary-Financial and Commodities Exchange over recent months, due to good profit margins and the growth of liquidity.
At the beginning of the year, Transilvania was the only fund investing on the futures market, now there are more than 10 out of 32 funds operational at the moment that invest in such contracts.
The funds use the Sibiu market especially for hedging operations (risk coverage for periods of decline of the stock exchange), as well as for speculative operations.
"We have investments made by both the Intercapital and Capital Plus on the Sibiu market. Part of the investment consists of hedging operations, while another part of it consists of speculative transactions. In terms of percentage, the amounts earmarked for these purposes are small, compared to net asset, but investment could increase if new investment opportunities arise," said Razvan Rusu, fund manager with Certinvest. He expects managers of mutual funds to show more interest in the transactions on the Sibiu market. The introduction of nine-month and 1-year maturity terms has played a large part in increasing the volume of transactions on the futures market, as high liquidity has attracted a growing number investors.
Another advantage offered by the Sibiu Exchange is the possibility of margin trading, which allows investors to gain more from price fluctuations. "We started trading on the Sibiu Exchange in July, but we try to maintain an exposure of up to 1% of the net asset. If I notice am upward trend on the spot market, I go for derivatives and use leverage to derive higher yields, so I can invest the profits I make on the spot market. Moreover, transactions on the futures market allow us to make good use of the increases of the SIFs, considering that share of some SIFs in our portfolio is close to the maximum limit of 5% the National Securities Commission (CNVM) set," explained Marius Olteanu, general manager of SIRA, which manages Omninvest and FCEx.
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