A broader approach of money

There is a need for more complex perspective on international capital markets, as the Romanian investors still do not access them, states Ioan Gheorghiu, business development and sales director, Pioneer Investments

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IONUT GHEORGHIU

IONUT GHEORGHIU

SALES MANAGER at PIONEER ASSET MANAGEMENT SAI. SA

There is the need of a more refined perspective when addressing such investments in different types of funds, that of putting the things into perspective. The Romanian investors still do not access the international capital markets in order to better align the investment approach to a different, more complex perspective.

 

The local investment funds market, estimated at around 2 .1 billion Euros is represented by an overwhelming majority of 90 percent by the retail clients of the banks invested in fixed income low volatility funds and only roughly 10 percent of assets invested in higher potential return genuine investment funds.

 

THE CONSERVATIVE TYPE OF INVESTOR

Looking at current fund flows, the former communist block except Poland is now not appealing for large asset managers. And, analyzing the present landscape of this market, I would say it is rather difficult for a manager of foreign funds to breach locally, since the penetration “power” of an asset manager on a certain market is determined mainly by the maturity of the market and the strategic positioning of its distributors. Thus, the local market is mainly consisting of former money market funds, sold as a form of savings quite similar to a bank deposit. To make a difference, we strive to focus on promoting funds with volatility, able to generate returns over the market. These funds do not attract high flows from local investors but instead, they might deliver higher performances and make the difference on the long run.

 

Being a global investment fund manager, we manage investment products with assets worth over 200 billion EUR. We run two types of fund classes, tailored for two different types of investors, first layer with a more conservative profile, saving in RON (mainly wishing to preserve capital in conditions of low volatility of fund unit value). This kind of investors, such as risk averse individuals and companies look at the short and medium term liquidity and exhibit a reduced appetite for risk; and second layer consists of investors who want diversification of their investments in terms of foreign currencies, geographies, various financial instruments and risk profiles.

 

The investment policy of the most conservative fund - STABILO aims at structuring investments predominantly in debt securities market. This fund encompasses over 1,500 clients and mainly targets local government bonds, while the second type of approach is a wide range of international funds, domiciled in Luxembourg, denominated mainly in Euros and US Dollars.

 

The second type of funds addresses all types of investors, especially those willing to pursue a dynamic approach on portfolio gains and risk. The main objective of the International Funds is to achieve capital growth under various risk profiles as highlighted above. All investments made by the funds are based on prudent portfolio diversification. So, roughly half of our sales volume comes from the most conservative fund, and a profile of its customer would be: the investor willing to deposit, targeting savings. The other half of our sales volume comes from the wider range of International Funds which we promote through our well positioned distributors, targeting more sophisticated clients. Our main job is to place our investor’s money in safe opportunities with long-shot earnings , rather than short-term risky opportunities. Just as an example, being fixed income generators, the bonds have been the most “fashionable” investment vehicles these years after the crisis, also propelled by the constant yield compression in the international debt markets. Very few local investors could have benefited from such trend, mainly because of financial unawareness.

 

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