Risky funds see the biggest declines

The most risky investment funds also reported the biggest declines in the last year, with investors turning their attention towards the risk indicator for mutual funds, following the major declines experienced by the local Stock Exchange. So far, the main criterion used by an investor in choosing an open-end fund was the yield, rather than the risk indicator, amid an advancing market. However, the strong depreciation witnessed by the local capital market over the last eight months has shifted the investors’ attention from yields, which have seen major declines, towards the risk indicator. The VaR risk indicator calculates how much an investor can lose in an equity or a balanced fund, during a given period. For example, if a fund has a 40% VaR indicator, this means that for a 100 RON investment in the fund, there is a 95% likelihood that the investor’s loss will not exceed 40 RON in a year, in other words, that they will be left with at least 60 RON of the 100 initially invested. Napoca, the equity fund managed by Globinvest, having a 41.2% VaR, the second highest on the market of investment funds, reported a loss of 28.5% over the last 12 months, the biggest in the sector. Equity fund Omninvest had the highest risk indicator, 42%, and saw a 23.4% depreciation of its fund unit.