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Almost 4,000 fresh bond fund investors over January - July 2008

Bond funds drew almost 4,000 investors in the first seven months of the year, ten times more than the aggregate number registered over the past three years; the drawn in resources totaled RON 105 million (some 30 million euro), four times more than net inflows over the last three years, writes daily Ziarul financiar.

The best performing entities over this period were BCR Bonds and BCR Classic, the two bond funds under the trusteeship of BCR Asset Management, with over RON 90 million (some 25.7 million euros) drawn in from 3,700 investors January - July 2008. In the period of reference BCR Bonds scored a yield of 6.3 pct and BCR Classic reported a yield of 2 pct.

'The investors who migrate from share funds to bond funds have a speculative behavior. When making the investment decision, they seek a high return in the first place. The fact that share funds outperformed bond funds by far in the past years determined investors to prefer share funds. Now, on the background of severe stock exchange corrections, the situation reversed,' Serban Nascu, vice-president of trustee company Target Asset Management, told the cited paper.

For a long time, the bond funds industry has been driven in the background because share funds were grabbing the investors' attention with the high offered yields; the low risk attached to placements in bond funds counted far less. Now, that share funds post 12-month returns as low as minus 50 pct, investors turned to more profitable placements, and the only investments to produce positive yields in the first seven months of the year were bond and monetary funds.

'After seven years of continuous market growth, investors no longer perceived placements in shares as risky, because they did not have the experience of long term corrections, as it happens now. I believe that investors will change their behavior and placements in shares will be understood not only from the perspective of potential yields, but also of the risk of loss,' said Mihail Ioan, Raiffeisen Asset Management chairman.

However, the 36 pct decline in share funds assets and the withdrawal of some 1,600 investors from these funds shows that yield remains the decisive element for the investors' behavior.

In 2007, when most stock exchange indices advanced by more than 20 pct, share funds attracted more than 2,200 new investors, whereas bond funds gained only 200 new clients. At present, those who invested in share funds one year ago see their money cut to half.

According to the paper, apart from the investors' high appetite for yield, another explanation for the sped-up growth of bond funds is the result of the diversification of the product array and the sales force of the companies managed by banking groups.

Sursa: http://www.rompress.ro

Tags: funds investors bcr share euro

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