The launches of the Confort Fund and of the Romania Actiuni share Fund are the result of RAM’s expansion strategy, whose target was to increase the risk level of the two funds the company already administers, Raiffeisen Benefit and Raiffeisen Prosper. Romania Actiuni can place 100 percent of resources into shares.
Raiffeisen Confort will be the first fund in Romania to use the Constant Proportion Portfolio Insurance (CPPI) administration system, which capitalizes earnings on the equity market when the latter increasing and limits the effect of a drop in share price, by transferring investments to bonds and other fixed-income instruments.
Raiffeisen Bank has already invested €1 million in the initial capital of each of the Confort and Romania Actiuni funds. RAM officials believe that CPPI ensures a title buyback of 90 percent of the initial investment, if the buyback takes place two years before and of 100 percent at the end of this period. However, if the market offers a favorable trend, buybacks are made at the current value of the investment unit.
Raiffeisen Benefit and Raiffeisen Prosper funds own €40 million worth of assets, and through them RAM controls 15 percent of the open investment fund market.
“This product, which was missing on the Romanian market, meets the demand of those with an aversion for high risk and increases the credibility of mutual funds,” said Mihail Ion, President of RAM. He added that funds such as Confort are highly sought after in Central European countries, including Slovenia and Croatia.
Raiffeisen Confort will be RAM’s most conservative fund, in terms of risk, since the company has requested that the market authority increase exposure in investments of the Benefit and Prosper funds, which will raise their risk level.
“This product, which was missing on the Romanian market, meets the demand of those with an aversion for high risk and increases the credibility of mutual funds,” Mihail Ion President, Raiffeisen Asset Management
