The interest rate cuts and the fiercer competition on the market of mutual funds are making increasingly more fund managers start thinking about cutting the fees levied for redemption and money management.sleadend
BCR Clasic, the first fund launched by BCR Asset Management (the investment management company owned by the Romanian Commercial Bank-BCR), will reduce fees, which will greatly simplify their structure. SG Asset Management, the Romanian Development Bank's company, also announced it had stopped levying redemption fees for its only fund, Simfonia 1.
"The documents for approving the new fee system were submitted for approval to the National Securities Commission," said Doru Puiu Tiberiu, head of BCR Asset Management. For investments maturing in less than one month, the fee will remain 2%, but will disappear in the case of longer maturities.
The fund now levies fees ranging between 0.5% and 1% for investments maturing in one month - one year and additional fees, depending on the payment method.
BCR Classic has 113bn ROL in net asset, more than 6,000 investors and holds some 12% of the Romanian market of mutual funds. The fund chiefly invests in T-bills (about half of the asset) and municipal bonds (some 40 percent).
The fund's biggest investor is the Romanian Commercial Bank (BCR), with about 50 billion ROL in fund units.
The fee cuts may help the two funds increase their market shares. BCR Clasic and SG Asset Management use the respective banks' territorial networks in order to distribute the fund units, whereas this operation entails additional costs for the other management companies, which thus have to maintain their fees.
BCR Asset Management launched another fund in July, with a higher risk degree and which operates with long-term investments - BCR Dinamic. The fund now has 26bn ROL net asset and has grown 4.4% since launch. The biggest mutual fund in Romania is Simfonia 1, with 415bn ROL net asset and 42% market share.
vlad.nicolaescu@zf.ro
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