The number of investors in mutual funds is approaching one million, and that the value of the mutual funds’ net assets increased by 30% y/y to RON 24.44 billion at the end of last year, speakers attending a Bucharest debate on the topic explained.
The net inflows maintained their upward path in the fourth quarter of 2024, reaching RON 783 million, up by 7.4% compared to the same period of 2023.
The Bucharest Stock Exchange (BVB) and the Association of Fund Managers (AAF) held the debate, titled “Performance of investment funds at the end of 2024. Debate with investment fund administrators” on Tuesday, March 18. The debate featured the managers of some of Romania’s most important investment funds.
Among those present were representatives of BT Asset Management, Erste Asset Management, OTP Asset Management, Patria Asset Management, and Raiffeisen Asset Management. Discussions tackled the funds’ performance at the end of Q4 2024 and the outlook for early 2025.
“The [total] number of investors at the end of the year was 812,226. Together with the alternative investment funds segment, the total number of investors reached 913,000, so we are approaching one million. We are very optimistic that we will reach one million investors as soon as possible, and we hope to reach it by Easter,” said Jan Pricop, Executive Director, Association of Fund Managers.
Investors’ appetite for equity funds has also particularly increased: in 2023, there were 72,000 investors, and in 2024, there were 127,000 investors. The assets of this category of funds increased from RON 2.8 billion at the end of 2022 to RON 5.5 billion two years later.
In the roundtable segment of the event, Andrei Nedelcu, chief investment officer at Erste Asset Management, noted investors’ preference for diversified and local equity funds. According to him, 60% of new investors in 2024 chose such funds. This allowed the bank, the second largest in Romania, to grow its equity and bond fund, but also its fund investing solely in equities.
Speaking for Patria bank’s Asset Management department, deputy CEO Alexandru Ioan said that the flows regarding equities tended to be more volatile, much like the market itself. “There are large amounts of inflows when the market has a sustained growth, such as it happened from mid-2023 to mid-2024. In the last part of 2024, there was a small decrease. Some people marked profits or decided to reduce their exposure,” he said. He maintained, however, that building a strong portfolio takes time and that risk and price fluctuations are part of the process.
Other speakers highlighted that equity investments is no longer a niche activity in Romania, but a widely known way to save money. Similarly popular were Romanian state bonds, with attractive, 7-8% interest rates.
The global deficit problem, especially visible in the United States and Europe, along with the ongoing trade war and a possible rating downgrade for Romania, are among the risks identified by the fund managers. However, the country still offers opportunities, despite the fact that the Bucharest Stock Exchange is dominated by the banking, energy, and utilities sectors.
(Photo source: Wanida Prapan | Dreamstime.com)