Globinvest, an asset management company from Cluj-Napoca, is set to launch an exchange-traded fund, or ETF, grouping together companies in the energy sector and several financial companies.
Globinvest, a company with 30 years of experience on the Romanian capital market, will list the new entity on April 28 under the symbol GIBEFETF. Ilie Cenan, Chairman of the Board of the Cluj-based financial asset management company, told Profit.ro that all the needed documentation has been approved.
The fund is expected to provide investors with exposure to visible Romanian companies in the energy and financial sectors selected based on excellence criteria: the best companies, with the most liquid stocks, best profits over the past 10 years, and the largest long-term dividend distributors.
The BET-EF index includes top companies in the energy segment: Hidroelectrica, OMV Petrom, Romgaz, Transgaz, Nuclearelectrica, Electrica, Transelectrica, and Premier Energy, as well as 3 issuers from the financial sector, namely Banca Transilvania, BRD – Groupe Société Générale, and the market operator Bucharest Stock Exchange, the latter selected also based on development potential and portfolio appreciation potential, according to Cenan.
The fund has gone through the full authorization process with the Financial Supervisory Authority, or ASF, and is already being distributed through the brokerage firm IFB Finwest, with the initial estimate placing it at slightly over the RON 2 million mark. After listing at the end of this month, the symbol will be available for trading on all brokerage terminals, and based on demand, new units will be issued, increasing the ETF’s capitalization.
Globinvest’s requirement for the composition of the BET-EF index was that no issuer should exceed a 20% share in its structure, says Nicolae Pastor, CEO of the Cluj-based company. Currently, the upper limit is occupied by shares of Hidroelectrica, OMV Petrom, and Banca Transilvania, while Romgaz is the 4th issuer, with a share of 12.74%.
Romania’s capital market has offered more and more ETFs, a popular investment tool. The most important fund is the one that replicates the composition of the BET index, managed by SSIF TradeVille and Patria Asset Management, under ticker TVBETETF, with a value of RON 457 million, or EUR 92 million.
Last spring, InterCapital listed their first product at the BVB, which tracks the total-return BET-TRN index, ticker ICBETNETF, and which has since reached a value of RON 30.43 million (EUR 6.10 million) on BVB. The Croatian asset management firm also listed an ETF that offers investors exposure to the Slovenian stock market by replicating the SBITOP TR index structure from Ljubljana, ticker ICSLOETF.
“It’s a trendy product,” says Globinvest director Pastor about ETFs. “It’s starting to gain visibility here as well, and more and more people are moving into this investment area, as it is a more accessible instrument.”
The new ETF will have a management fee of 0.9% and most likely the total fee will be somewhere around 1%. The fund is expected to outperform the BET-EF index over time because the index is not a total return type, but the companies in its structure are dividend distributors. As such, annual profit distributions are expected to accumulate over time in the fund’s assets under the GIBEFETF symbol.
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