The mutual funds market will go beyond 1 billion euros by 2010, according to analysts. The main players are already striving to secure a solid share of the market.
Fund managers are banking on a decline in interest rates and on Romanians'' rising appetite for investments and foresee fast market growth. They are also bearing in mind the example of neighbouring countries, such as Poland, the Czech Republic and Hungary, where the mutual funds industry has witnessed solid growth after European Union integration.
"The mutual funds market will have definitely exceeded one billion euros in 2010. Judging by the growth pace seen in neighbouring states, it would be only natural that the market growth rates should range between 50% and 100% per annum," considers Dan Stifter, general manager of Eurobank Mutual Funds Management, ranking third on this market at present.
"The overall economic trend, the improving living standards, the rising financial accumulation degree of the population, the more solid financial knowledge and the growing appetite for investments amid banking interests decline are the main factors helping the fast-paced development of this market," maintains Stifter.
Eurobank Mutual Funds Management is the investment management arm of Eurobank Greek bank, the majority stakeholder in Bancpost. Bancpost, one of the players that have recently joined this market, in March launched two mutual funds in which it placed around 17m euros, thus becoming the third leading manager on the market.
Most players on the market expect it to boom given that its level is very low at the moment. The scandal around the collapse of the National Investment Fund (FNI) not only disrupted market development, but also set the market back by several years, making investors lose their confidence in mutual funds. As a result, it took the market more than 6 years to revert to the level of 1999, a period during which neighbouring markets saw almost exponential growth.
The total net assets of mutual funds at the end of last year stood at 92 million euros. The market last year surged by 74%, amid the emergence of new players and rising investments by small investors. If the same pace maintains over the following five years, in 2010 the market is likely to amount to almost 1.5bn euros.
"We expect a value of 6 billion euros to be reached in 2010, but this sum is related to all the types of collective placement bodies, not only to mutual funds. To reach the targeted value for 2010, we are banking on a 70% market growth rate per annum," says Radu Hanga, the general manager of BT Asset Management, the investment management arm of Banca Transilvania.
In the first quarter of this year, the mutual funds increased by 41%, to 130 million euros. Yet, the level is lower compared with the end of 1999, when the total assets of mutual funds amounted to 157 million euros.
Mutual funds market
* Fund managers forecast accelerated market growth in the future
* Expected to exceed 1bn euros in 2010 and maybe reach 1.5bn euros if the current growth pace maintains
* Projected to boom considering its current low level
* Total net assets of mutual funds at the end of last year stood at 92m euros
* Advanced by 74% last year, amid the emergence of new players and rising investments by small investors
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