Several hundred Romanians, mostly middle and top managers, chose to have their assets discretionary managed. The customers also include an apartment owners association, which has been investing its reserve fund in an account managed by Certinvest, in order to make a higher profit than bank deposits would provide.
The largest asset manager is Certinvest, which manages RON70.1 million in discretionary accounts for 168 customers.
“We have 168 discretionary account customers, who have 216 accounts with total assets of RON70 million. The risk profile of the managed account customer is moderate, and investments are chiefly directed to fixed-income instruments,” said Daniela Vasile, Certinvest head of private portfolios.
“Only 10% of our customers have a stock component in their portfolios.”
A more unusual customer of Certinvest is an apartment owners association, which has been investing its reserve fund for three years in order to get a higher yield than bank deposits can provide. Certinvest manager says that individual accounts have generated an 8% yield in the past year for the clients investing in fixed-income instruments. Those investing on the stock market got a 24% yield over the past twelve months. In comparison, bank deposit interests stand at less than 4% per annum and the main index of the Bucharest Stock Exchange, BET, has gone up 23.6% in the past year.
Certinvest plans to boost discretionary managed assets by 20% this year.
Unlike mutual funds where investors have to accept the fund’s investment strategy without any say in it, discretionary accounts allow investors to work out a yield target, an investment strategy with their asset managers and take on greater risks. Since anyone who wants to open a discretionary account is required to have more than RON100,000, the profile of investor in such accounts is different than the mutual fund clients’.
Mutual fund investors are typically average-income people with small savings. There are more than 250,000 mutual fund investors, while the number of those with a discretionary account stands at several hundred, according to ZF estimates.
The market of discretionary accounts managed by asset management companies reached RON200.4 million at the end of April, flat on the beginning of this year, according to the Fund Managers Association (AAF) statistics.
“The stagnation is mainly due to a wait-and-see approach of the customers who are unhappy with the yields of the fixed-income instruments, and with the lack of clear signals to encourage investing in stocks (…), “ said Dragos Neacsu, chairman of Erste Asset Management.
The second largest asset manager on the market is Raiffeisen Asset Management, with RON67 million assets primarily managed for institutional customers. Third leading asset manager is Erste Asset Management, with almost RON60 million assets from 20 customers. Its biggest individual customer invested more than EUR2 million with it, allocating quite a bit to stocks. (EUR1=RON4.4343)
(English version by Loredana Fratila-Cristescu)