One Year Through The Crisis, Investment Funds, The Investors" Best Choice

Even if capital market investors had had a crystal ball foretelling the future a year ago, they would probably have not even imagined that an investment fund could double their investment in only 12 months with a global economic crisis in progress.

Well, the best choice for those who dared make investments at a time when the capital market was just starting to recede turned out to be an investment fund, BT Maxim, which doubled their initial capital in one year. Theoretically, an investor spending a modest 10,000 RON on shares in the BT Maxim a year ago would have over 20,000 RON now, as the fund"s assets gained 103.96 per cent between 2 October 2008 and 2 October 2009.

BT Maxim"s performance appears even more spectacular as most of the shares listed on the Bucharest Stock Exchange (BSE) lost significant value in the referenced period, giving the fund"s managers the opportunity to capitalize on BSE"s quick recovery that immediately followed the plunge. Specifically, the BSE lost nearly 60 per cent of the value in only a few months and then grew as much as 125 per cent in some cases in the following six months.

Nevertheless, the BET Index reflecting the ten most liquid stocks listed on the BSE is currently 16 per cent below what it was a year ago, whereas the BET-FI, reflecting the performance of the five financial investment firms (SIFs), is 25 per cent down from the level recorded a year ago.

Gold was also a good choice for investors, as it gained 10 per cent between 2 October 2008 and 2 October 2009.

However, those who preferred to deposit their liquidities in banks hoping for a positive interest rate in real terms did not do so well, as Romania"s national currency lost 12 per cent against the euro in the referenced period. As isolated exception, the investors who made EUR-denominated deposits with Banca Romaneasca did not lose anything, but gained a modest 0.4 per cent to their initial amount.

Retrospectively, classic, low-risk investments did not manage to steal the glamour from riskier but more profitable investments, even during a crisis, although numerous investors continue to prefer them.