Mutual funds plagued by underperformance

The increase of the open investment fund shares in December kept below the inflationary rate, as it had also done in November. Investments in mutual funds in December produced a 1.3% yield on the average against the 1.5% inflation in the same month. The December fund gain was even lower than the average monthly inflationary rate last year, 1.4%. The overall mutual fund growth in 2002 reached 23.7% against 17.8% inflation, therefore the mutual funds posted approximately 6% growth in real terms last year. The slow growth registered by funds is due to the investments on the money market directed mainly to T-bills, which have posted significantly lower yields last year. T-bills had come to account for more than 80% in the total assets of the funds by the end of 2002, while banking deposits accounted for 8%. The largest investment fund on the Romanian market, Simfonia 1, had placed all of its money in T-bills (492bn ROL) by the end of last year. Simfonia 1 is administrated by SG Asset Management, the investment management company controlled by Banca Romana pentru Dezvoltare (Romanian Development Bank – BRD) and accounts for half of the mutual fund market in Romania. ZF