Adobe, Hidroelectrica and One United Properties shares dominate portfolios of Investimental clients

The clients of Investimental, the newest broker on the Romanian capital market, showcase diversified investment preferences throughout their portfolios. As of July 2023 until the end of February 2024, Investimental clients have shown a strong preference for a mix of high-growth US tech stocks and stable, high-yield Romanian companies and government bonds.

“Since the launch, we have observed a growing interest among our clients in the US market, driven by the notoriety of US stocks and the anticipated push that Stock Option Plans implemented in American companies active in Romania have. Therefore, with its global recognition and robust returns, the US market naturally attracts clients seeking diverse and dynamic investment opportunities. At Investimental, we recognize the allure of the US market; however, we encourage our clients to consider the potential of the Romanian market. By highlighting the notable performance of the BET index and the attractive dividend yields of recent years, we aim to spotlight the advantages of local investments. Furthermore, the potential reclassification of the Romanian market by MSCI to an emerging market could replicate the positive impacts observed in markets like Kuwait and the UAE, leading to increased liquidity and growth. This balanced investment strategy leverages the expansive opportunities of the US alongside the still not fully tapped potential of the Romanian market, fostering a well-rounded investment portfolio for our clients,” stated Mihaela Biciu, CEO of Investimental.

At the end of February 2024, top holdings of Investimental clients include software company Adobe (ADBE), Romanian hydropower giant Hidroelectrica (H2O), real estate developer One United Properties (ONE), American healthcare and insurance company Cigna Group (CI), Romania-founded tech unicorn UiPath (PATH), Fondul Proprietatea (FP), as well as government bonds issued under the Fidelis program (R2812AE).

Since the broker’s launch in July 2023, Investimental clients have predominantly been active on the Romanian market, with 63% of trades done on the Bucharest Stock Exchange (BVB). The remaining 37% is concentrated on the US capital market. The top 3 most traded financial instruments on the Romanian market in the analyzed period were Hidroelectrica (H2O), BRD Societe Generale (BRD), and Banca Transilvania (TLV), followed by Fondul Proprietatea (FP), Fidelis government bonds (R2812AE), OMV Petrom (SNP) Romgaz (SNG), Transport Trade Services (TTS), and Electrica (EL).

On the US front, the most actively traded stocks include British semiconductor and software design company Arm Holdings (ARM), world leader in AI computing NVIDIA Corporation (NVDA), and UiPath (PATH). The list also includes Beamr Imaging (BMR), Microsoft (MSFT), Palantir Technologies (PLTR), Berkshire Hathaway (BRK/B), Google (GOOGL), Apple (AAPL), and C3.ai (AI).

The activity of Investimental clients on the US market is driven, in part, by the strategic emphasis of Investimental on Romanian employees of US-based companies who benefit from Stock Option Plans (SOPs). Shareholders of US companies who trade the stock through a Romanian broker pay a capital gains tax between 1% and 3%, depending on the holding period, compared to 10% paid at foreign brokers. Therefore, trading shares through a brokerage house registered in Romania can offer investors up to 10% higher gains.

Clients also follow global ETFs, with the largest holdings being placed in ProShares Ultra VIX Short Term Futures (UVXY), which follows the performance of the S&P 500® VIX Short-Term Futures Index, and ProShares UltraPro QQQ (TQQQ), which follows the Nasdaq-100 index, which includes 100 of the largest domestic and international non-financial companies listed on NASDAQ by market capitalization.

In the coming weeks, Investimental and InterCapital Asset Management, the largest independent asset manager in Croatia with assets under management of 450 million euros will launch a new Exchange Traded Fund (ETF) on the Bucharest Stock Exchange, which will track the performance of the BET-TRN index, which includes the 20 Romanian blue-chip companies such as Banca Transilvania, Hidroelectrica, OMV Petrom or Romgaz, to mention a few. The BET-TRN stands for “Total Return Net”, indicating that the index reflects not only the price movements of the blue-chips but also assumes that the net dividends are reinvested.

Investimental’s client base ranges from managers and IT&C specialists to engineers and economists, showcasing a broad spectrum of investment-savvy individuals. The highest proportion of Investimental clients is aged between 35-44 years (37%), representing a broad interest in investment across different ages. More than a third of Investimental clients are from Bucharest (38%), with significant numbers from Ilfov, Cluj, and Iasi, indicating Investimental’s extensive reach and the growing interest in investment across Romania.