Mutual funds take on unit-linked product market

Mutual fund managers are preparing to directly compete with the savings products offered by insurance companies, given that, over recent years, life insurance contracts with a savings component, promising a stable income at retirement age, have proven to be more alluring for investors than classical mutual funds, which experienced the SAFI or FNI scandals.

Certinvest investment management company is preparing to launch a mutual fund for savings this year, which will also have an insurance product attached, while BCR Asset Management is going to add in the prospects of the funds it already manages some bonuses for customers investing on a regular basis.

Insurance contracts including a savings component concluded by insurance companies stipulate the insured client has the obligation to make regular payments to buy unit-linked products, which may be an advantage for those who find it difficult to save month by month.

“The fund we want to launch is to target either those wanting to invest periodically to secure some income at a certain age through a periodical repurchase plan, or those investing a large sum at the beginning to subsequently benefit from income from the fund,” says Eugen Voicu, Certinvest chairman. The company is controlled by the Romanian-American Enterprise Fund and currently manages four mutual funds.

“The fund will have a savings component, offered for free, and constituting a counteroffer to unit-linked products provided by insurance companies,” Voicu also specified.

The fund Certinvest plans to launch by yearend will be euro-denominated, like most savings products of insurance companies. The company has not decided yet on the kind of insurance it will offer investors, but the alternatives it is considering are life insurance and medical insurance.

BCR Asset Management, Banca Comerciala Romana””s investment manager, hopes to encourage its customers to make regular investments through some bonuses offered at yearend.

“We will sign some contracts with investors regarding a periodical investment programme, and should they abide by it we will hand them back, at the end of the year, half of the management fee in the form of fund shares,” says Doru Puiu Tiberiu, general manager of BCR Asset Management. The company manages two mutual funds, one with a monetary profile and the other a diversified profile.