Volatility in the stock market struck the evolution of mutual funds in the first half of 2018

Aurel Dragan 13/07/2018 | 06:00

The volatility on the stock exchange market has affected mutual funds evolution in the first half of the year and the net asset value went down 4.7 percent compared to the beginning of the year. The net value is the sum of the net assets of 201 open and closed funds (local or foreign) active on Romanian market (except SIFs and FP), according to Fund Managers Association (AAF).

For the 78 local open funds the value of net assets fell by 2.5 percent in June compared to the previous month to RON 20.9 billion (EUR 4.5 billion). The decline for the entire half of the year was 7.8 percent.

In June, local open-end funds registered net outflows of RON 577 million (EUR 123.8 million), with targeting bonds and fixed income instruments funds down by RON 345 million, those under the “other funds” down RON 199 million, the diversified ones down RON 13.8 million, the shares funds down RON 12.9 million, those with absolute yields down by RON 8.1 million and those with capital guaranteed down by 3.4 million lei. The monetary funds inflows went up by RON 6 million.

The net foreign assets denominated in RON of the 98 open foreign funds distributed in Romania decreased by 0.1 percent compared to May, to the level of RON 2.95 billion (EUR 633 million). Compared to the beginning of the year the value registered an increase of 0.2 percent.

The net assets of the 25 closed funds (excluding SIF and FP) increased by 8.6 percent in the reported month to RON 1.23 billion (EUR 264 million); local closed funds had net inflows in the reported month of RON 26.3 million (EUR 5.6 million) and an increase in net assets this year of 74.8 percent.

Among the most important local funds, the one that has the highest growth in asset value from year to date is ETF BET Tradeville (high risk fund), managed by SAI Vanguard Asset Management, with 6.58 percent. On the second place we find BT Index Romania ROTX (high risk fund), managed by BT Asset Management SAI, that went up by 5.86 percent and on the third place is Fortuna Gold (low risk fund), managed by SAI Broker, with 1.73 percent growth.

More than half of the funds taken into account are registering a decrease compared to the beginning of the year, no matter what risk profile they have. Active Dinamic (high risk fund) managed by SAI Swiss Capital Asset Management shows the biggest drop, 4.02 percent, followed by OTP AvantisRO (high risk fund), managed by OTP Asset Management Romania, with 3.39 percent, and Napoca (high risk fund), managed by SAI Globinvest, with 2.9 percent.

The first semester was not profitable for investment funds, given the volatility on the stock exchange corroborated with low interest rates for banking deposits and for government bonds. The funds with investments on listed shares can cover the loss and end the year on the plus side, while monetary and bond funds will remain with a small gain and no risk at all.

The Bucharest Stock Exchange ended the first semester on the plus side, but the ‘ride’ was not smooth. While the earnings for the main indexes were around 4 percent, only the one that takes into calculation the dividends paid went up to 11 percent.

For bank deposits the interests were just little bit up and still around 2 percent per year, while interest rates for government bonds went up to 3.4 – 4 percent and even 5 percent for the individuals issue.

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