The Romanian investment fund market has successfully overcome the tense period from the first quarter of the year, caused by an unpredictable economic and political context as well as increased volatility in global markets, according to fund managers gathered at the quarterly debate on the performance of investment funds organized by the Bucharest Stock Exchange and the Fund Administrators’ Federation.
The investment analysts and fund managers present at the meeting pointed at the 34% annual increase in the number of investors, nearing the one-million mark, as a sign of the stability of the investment market.
Moreover, they noted that there were no massive withdrawals, and clients did not react impulsively to short-term fluctuations. On the contrary, most continued to invest, maintaining a long-term perspective.
“Unlike the cryptocurrency market, which currently has no rules, our industry and the stock exchange have very clear and strict regulations, because that’s how trust is built,” said Horia Gustă, AAF President, at the opening of the debate.
Figures presented during the meeting show that assets have grown over the last 10 years by 56%, surpassing RON 47.4 billion (EUR 9.3 billion), of which 59% represents the open-end investment funds segment. The number of investors in open-end investment funds reached 865,831, and together with alternative funds, the number exceeded 950,000, nearing the one million milestone. Year-over-year growth was significant, almost 34%. Notably, the equity funds segment saw a nearly 67% increase in investors, diversified funds grew by 26%, and bond/fixed-income funds by almost 25%.
In terms of net asset market share for open-end funds, half (49%) were in bond and fixed-income instruments, 24% in equity funds, 13% in diversified funds, and 14% in other funds.
Looking ahead, industry representatives are “neutral-positive,” considering, on one hand, the ongoing discussions about fiscal adjustments the future Government will assess to correct significant deficits, and on the other hand, the “tariff war” of the Trump administration.
“It’s clear that volatility will continue. Romania currently doesn’t have a Government, has the largest budget deficit in the EU in 2024, and estimates for this year are around 7.5%. We’ll have to see what fiscal measures the new Government proposes. Internationally, the situation is also unclear. Tensions persist between the US and Europe over trade tariffs, so volatility will continue,” said Alexandru Ilisie, Chief Investment Officer at OTP Asset Management.
Despite expected tax hikes and the impact of US tariffs on EU imports, fund managers don’t expect major destabilization of the national economy.
They also touched on government borrowing at rising interest rates. The bond market is crucial, as it reflects government borrowing costs and also affects corporate financing costs, since government bonds are a benchmark.
“It’s a globally expensive bond market. In calmer markets over the last five years, the US borrowed for 10 years at 1.5–1.7%. Now, it borrows at 4.5–4.7%. If the US has problems with high borrowing costs, imagine emerging countries like Romania,” said Milan Prusan, Country Head at Goldman Sachs Asset Management (Bucharest).
Regarding future growth opportunities, industry representatives consider the utilities sector a solid choice for investors, offering the potential for consistent returns. At the same time, the defense industry and infrastructure remain strategic areas that are expected to grow and receive state support due to geopolitical tensions.
(Photo source: press release)
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