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August 11, 2022

OTP Asset Management Romania has launched OTP Innovation, the first open-end ESG investments’ fund

  • The first locally created and managed open-end investment fund promoting environmental and social characteristics (ESG) in accordance with the provisions of art. 8 of the EU 2088/2019 Regulation.
  • Spread on companies that invest significantly in Research & Development (R&D) area


OTP Asset Management Romania has recently launched OTP Innovation Fund, the first fund in Romania that offers the possibility to invest, internationally, in companies that allocate a significant share of their revenues for Research & Development (R&D).

OTP Innovation intends to have a diversified portfolio on various sectors, so the investments will be directed to companies in various areas of activity, such as technology, bio-pharmaceutical,
e-commerce, automotive, etc. All these companies allocate important budgets (in ratio with their turnover) to the financing of R&D programs. R&D includes activities that companies undertake in order to innovate and introduce new products and services with a positive effect, both on society as a whole and on the financial performance of the respective companies. To identify these companies, OTP Asset Management Romania uses an important indicator – R&D intensity. This indicator is defined as the ratio of a firm’s R&D expenses versus the company’s sales.

“Even though there is a strong emotion at this time about the war in Ukraine, we are positioning ourselves as long-term investors, so our strategy, investment policy and concerns are firmly anchored in the future. Our responsibility is to currently manage the funds from our portfolio in a professional manner, but also to have a wide-angle view of the opportunities that will bring added value to our customers’ investments, in the future,” said Dan Popovici, CEO, OTP Asset Management Romania. Regarding the launch of this fund and aspects related to ESG criteria, he consideres that “the fund represents an opportunity to align customers’ investments with personal values”.

OTP Innovation addresses to retail and institutional clients who are willing to accept a high degree market risk and want to invest in companies with medium to long-term growth potential. The recommended investment period is of minimum 3 years.

Investors may use two different classes of fund units, Class L for investments in lei and Class E, for euro. The minimum amount required to invest in Class L is 50 lei, for Class E it is 50 euros, and for subsequent subscriptions, 50 lei and, respectively, 10 euros. The fund will be distributed through OTP Bank Romania’s branch network and the Internet Banking platform, OTPdirekt.

Investing in OTP Innovation Fund includes a series of benefits:

  • Access at global companies that invest significantly in R&D.
  • Zero cost for fund units’ transactions (subscription / redemption) compared to other significant transaction costs, in particular on international stock exchanges, and considerably reduced costs compared to direct investment in shares.
  • Durability: By investing in the fund, you take part in supporting and promoting the characteristics of ESG (Environment, Social, Governance).

ESG and durability risk management criteria are integrated into the Fund’s investment strategy. The objective of OTP Asset Management Romania is to maintain the aggregate sustainability risk profile of the Fund in the low-risk class.


ESG’s (Environment, Social and Governance) significance and importance:


The environment is perhaps one of the most important concerns of the 21st century. The way companies use energy and manage their environmental impact has far-reaching consequences for society and for the planet.

The Social impact may not be obvious but it is an integral part of the ESG framework. The way a company encourages one’s people and culture will have a knock-on effect on the wider community. Their inclusion and diversity will pave the way for a sustainable future.

There are two parts of the Governance criterion. One of these is to prevent infringements, in order to ensure transparency and the promotion of best practices in the industry, as well as dialog with regulators. The other part is the internal system of controls, practices, and procedures to govern and take effective decisions.

OTP Asset Management Romania uses ESG ratings provided by an external data provider – MSCI ESG Ratings. The supplier collects extensive market data, based on company reporting, publicly available data through mass-media, and official databases.

The investment approach of OTP Innovation fund aims to have a long-term strategic allocation, of at least 85% of the fund’s portfolio, in investments aligned with E/S. features. Through investments aligned with E/S features, we mean investments in shares issued by companies with medium or low sustainability risk.

OTP Innovation will specifically exclude investments in the following financial instruments:

  • Financial instruments related to controversial weapons, including nuclear, biological, chemical, blinding laser weapons, anti-personnel mines, cluster munitions, undetectable fragments and other weapons that are either prohibited by international legal provisions or considered controversial because of the harm and/or disproportionate suffering they cause.
  • Government bonds issued by states that are the subject to general sanctions or states that violate human rights, according to international regulations.
  • Weak ESG performance and insufficient transparency in public disclosure of ESG data, respectively securities issued by companies with high sustainability risk.

The fund’s investment universe is marked by companies active in different business areas of activity such as biotechnology (Roche Holdings, Gilad Science), semi-conductors (ASML Holdings, Lam Research), chemical industry (SIKA AG), data processing (Mastercard, Visa, PayPal) or other major technology companies such as Microsoft, Cadence Design, Samsung etc. All these companies are investing heavily in R&D and are well positioned to benefit from the innovations they bring, a press release issued by the financial institution reports.


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