The mutual fund market will continue to grow in 2006, driven by the declining yields in the banking sector, and by the entry of new players on the market. "We expect this year''s growth to be even higher than in 2005.
"The positive trend will be favoured by the reduction of the banking performance, as well as by the emergence of new operators and of new investment products. Therefore, I believe we will witness an increase in the quality and quantity of the mutual fund market," stated Dan Nicu, the manager of SG Asset Management, the company that manages the investments of BRD-Groupe Société Générale.
The mutual fund assets went up by more than 65% in 2005, exceeding 80 million euros. However, Romania is lagging far behind the neighbouring countries in terms of collective placement bodies, which creates the premises for this positive development to consolidate.
"The total value of the managed assets, of less than 100 million euros is insignificant if we look at the over 5bn euros on the Hungarian market alone. Therefore the growth potential of this sector is far from being exhausted," stated Radu Hanga, the manager of BT Asset Management, the investment management company of Banca Transilvania.
"The continuation of the growth will be favoured by the economic balances, by the inflation and interest rate decline, as well as by the continuation of Romania''s economic growth after a not so fortunate 2005 in this regard. If these requirements continue to be met - and there are no signs that this is not going to happen, I believe a 40% growth forecast is not very optimistic," Hanga specified.
The market structure in its turn will keep changing so as to accommodate more equity funds, which will be gaining ground on the funds that invest in fixed-income instruments.
"Most of the fund managers increased their exposure to the capital market towards the end of last year and this trend will probably maintain in 2006. Most new funds launched on the market are either diversified or equity funds, that is funds investing on the Stock Exchange, which makes me think that the mutual fund market structure will continue to change," stated Doru Tiberiu, the head of BCR Asset Management, Banca Comerciala Romana''s investment management company.
The diversified and equity funds at the end of 2005 came to account for about 55% of the market, compared with only 35% at the beginning of the year.
The growth occurred at the expense of the monetary funds that came to account for approximately 30% compared with 57% early in 2005.
"The main reason for this change is the Romanian investors'' interest in high yields and the discontent with the decline in banking interests. Furthermore, the trend of the Stock Exchange over the last few years has instilled the perception in investors'' minds that the risks associated with the capital market investments are low," Tiberiu explained. andrei.chirileasa@zf.ro
