KD Investments launches first fund of funds

Slovenian company KD Investments Romania will launch KD Multifond, a fund of funds, a financial instrument that has never been seen on the Romanian market before. The National Securities Commission (CNVM) authorised the fund at the end of last week. Funds of funds invest primarily in other investment funds’ shares, and allow investors to diversify their portfolio with ease. The representatives of KD Investments expect the fund to become operational within the month; it will focus on equity and diversified funds. “The fund will invest in equity and diversified funds at first, which are generally high-yield funds. In time, we hope our portfolio will include other funds of the KD Investments group, funds from Luxembourg and Slovenia,” says Cosmin Paunescu (photo), general manager of SAI KD Investments Romania. Though a novelty on the domestic financial market, mutual funds investing in the units of other mutual funds is very common abroad. The advantage is that such funds ensure a greater diversification than regular funds. The disadvantage is that the investor will have to pay two commissions, one to the fund of funds and the other to the fund whose units they bought. “We want to cut the total commission by making our commission as small as possible, thus decreasing the investor’s costs. I am positive that, several months after the birth of the fund, the cost/yield ratio will be favourable to those that invest,” Paunescu says.