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June 26, 2022

Liquidity risk facing Romania unit trusts very low, specialists say

The value of redemptions during a month is below 2 percent of the value

The liquidity risk facing the Romanian-based unit trusts (the possibility that they might not meet future payments – editor’s note) is very low, the risk management specialists say, quoted Agerpres. The value of redemptions during a month is below 2 percent of the value of the investment funds assets and the duration of holding the stakes has increased up to two years in the case of the funds investing in interest-bearing financial instruments, said Mihail Ion, the president of Raiffeisen Asset Management, the company managing the second-largest unit trust in Romania. There are no hedging funds in Romania and the investment funds in Romania have a low sophistication level and relatively low assets, that do not make a significant contribution to the systemic risk, Ion explained. The managed investments and private pensions were the financial sectors having seen the fastest rise in Romania in the last years. The private pension funds are even safer, since the need of liquidity is less pressing than in the case of the unit trusts.

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