Mutual funds register losses of up to 80%

The yields in 2008 of open investment funds with share placements reached -80 percent due to last month's major depreciation of Bucharest Stock Exchange (BVB)-listed shares, according to data provided by fund administrators.

In many cases, yields of fund shares dropped by more then 50 percent in October, despite measures taken by administrators to restructure portfolios. The ten lowest yields vary between -25 and -50 percent. In the case of the Aviva Investors Intercapital fund, listed shares came to represent less than half the net assets of the company, a structure which corresponds better to a fund with diversified placements.

"Restructuring the portfolio is an option to soften the impact of stock exchange drops," said Razvan Rusu, Investment Manager of the company which administers the assets of Aviva Investors Romania.

The Raiffeisen Actiuni fund registered the highest drop in yield last month, of -50.1 percent, considering the 2008 yield was -79.8 percent. The valid values of financial shares on a certain day correspond to market quotations registered two days before, so yields benefitted from two of the three days of stock rise at the end of October. These enjoyed the strength to compensate for losses of the entire month. Main BVB indexes dropped 33-56 percent.

Business Standard