- Equity funds represented the yield engine in 2017. Thus, OTP AvantisRO achieved a 21.15% return, OTP Global Mix a return of 8.13%, and OTP Premium Return obtained 6.17%;
- OTP Asset Management increased its assets under management by over 5% in the last year and the number of investors increased by 8%;
- The implemented strategies on bond and equity portfolios were fruitful in 2017, mainly relying on corporations and technology;
- The investment themes that OTP AMR’s portfolio managers trust for 2018 are linked to rising interest rates and the continuation of the rally in global equity markets.
OTP Asset Management Romania reached assets under management of RON 667 million as of December 31st, up 5% over the previous year and increased its number of investors by 8% compared to 2016. OTP clients expressed their preference to equity funds, above the average of investment funds industry in Romania. OTP Global Mix, a multi-asset fund, ended the previous year with 2.8 times more investors than at the end of 2016, and tripled its assets under management to RON 32 million.
2017 was an excellent year for most risky assets traded on financial markets. Thus, the equity portfolios have gained, whether we are referring to equity funds, diversified or managed Absolute-Return funds. OTP AvantisRO yielded 21.15%, targeting the local shares market and benefited both from the opportunities offered by the dividend paying companies and from the trading of the new listed companies on the Bucharest Stock Exchange (BSE).
FDI OTP Global Mix brought to its investors in 2017 earnings of 8.13%, making it even more valuable, as it posted a return of 7.96% in 2016. OTP Premium Return recorded a yield of 6.17%, with a medium risk and a minimum investment of 1 year. The investment theme that brought the company the biggest earnings on international s portfolios was the Trump administration’s policy of persuading major US corporations to produce again at home, which enhanced the development of technology and of automation. Also, the giants in technology, FAANG (Facebook, Amazon, Apple, Netflix, Google) led the rally in 2017, and this evolution made the other economic sectors in S&P 500 to follow.
Regarding the bond portfolios, both in the diversified, Absolute-Return and bond funds, the main investment theme of 2017 was economic growth and the inflation return, both in Romania and the US. Also, for the Eurozone, OTP Asset Management counted on a revival of economic growth and the slow rise in inflation. To increase the return of funds, the company chose credit risk instead of interest rate risk. In Romania, inflation and yields on RON government bonds in were expected, so the fund managers decided to reduce the weight of government bonds in the second half of the year, preserving the yield achieved so far.
Although the volatility was low in 2017, taking into account the OTP clients profile, the company preferred caution, choosing to sacrifice potential returns to protect conservative investors. However, funds managed by OTP Asset Management achieved solid performance, far superior to classical savings instruments.
“We believe that equity exposures in the European and American financial and banking sectors will be profitable during 2018,” said the company’s representatives. “The rotation from Growth companies to Value companies will continue, at least in the first half of 2018. Even though the US shares are relatively expensive, we believe that some Growth-type companies can provide growth potential, as their financial results are on a strong upward trend.”
Dividends of companies listed on BSE remain a favorite investment theme on the local market. Also, OTPAMR experts believe that the medical services and discretionary consumer goods areas have growth potential. On the entire local market, the company expects the return on dividends to be higher than the capital appreciation.
“Given that American shares are, in terms of multiples, to historical highs, high volatility is expected during the year. An approximate 10% correction for the S&P 500 index may take place through the year. However, considering that the companies’ financial results are rising, and the global economy is performing well, we expect to close the year with values of the main international stock indices over current levels,” said Dan Popovici, CEO of OTP Asset Management Romania.
„With the support of ‘Right to Education’ Foundation we will continue to focus on financial education activities, in various areas, to help sustain and increase the number of investors in overall investment funds and to diversify them into equity funds, these being the ones that bring significant potential returns. History showed us that diversified investments are the simplest way to protect against inflation”, concludes the CEO of OTP Asset Management Romania.
Present on the local market since 2007, OTP Asset Management Romania SAI S.A. is among the most important investment fund managers in Romania, according to their assets under management. The company manages a diverse range of investment funds, giving investors the opportunity to access equity investments through OTP AvantisRO, OTP Global Mix, OTP Premium Return but also those in government securities and corporate bonds through OTP Bonds, OTP Euro Bond, OTP Dollar Bond and OTP ComodisRO. The company currently serves over 8.500 investors, retail and corporate customers, in nine open-end investment funds.
OTP Bank Romania is the subsidiary of OTP Bank, at the same time being the member of the largest Central and Eastern European banking group – a financial service provider operating from integrated and own funds. Its activity is characterized by a sense of responsibility, commitment and high professionalism. Keeping in mind its customers’ needs and the current market situation, OTP Bank Romania is a reliable partner in the area of financial services
OTP Bank is the 9th safest bank in Central and Eastern Europe in 2017, according to Global Finance. OTP Group offers universal financial services to almost 13 million customers in nine countries through its network of roughly 1,300 branches, ATM network and electronic channels.
The Right to Education Foundation supports and promotes the development of financial, economic and management skills among pupils between 10 and 18 years old and offers them psychological tools for conscious career planning. In partnership with educational institutions and NGOs from Romania, the foundation managed to involve, during its 3 years of activity, over 3,500 pupils in 55 schools in Romania. In October 2017, OTP Bank Romania and The Right to Education Foundation launched OK Center, the first non-formal financial education center in Romania. The 1200 sqm space is dedicated to those who want to update their financial knowledge through innovative methods.