Since the start of June, Bulgarian investors have been able to participate, through Raiffeisen Global Growth, in the positive developments in the global stock markets. As the first master-feeder fund to be approved in Bulgaria, it invests in the Raiffeisen-Global-Aktien fund administered by international asset management company Raiffeisen Capital Management. “We’re pleased that we were able to implement the first master-feeder structure in the Bulgarian market together with Raiffeisen Asset Management Bulgaria”, said Rainer Schnabl, Managing Director of Raiffeisen Capital Management responsible for sales and distribution. “A feeder fund invests, if possible, entirely in the master fund, and therefore mirrors the latter’s investment process and investment structure – any cash holdings are used for transactions involving shares in the fund”, explained Schnabl.
The master fund for Raiffeisen Global Growth, Raiffeisen-Global-Aktien, has, after a very good 2014, achieved staggering capital appreciation so far this year too – a gain of nearly 20%. Since its launch in 1986, it has so far returned around 6.4% p.a. (as at 05/29/2015) – and that despite the pronounced stock market declines that occurred in the meantime in the wake of the internet bubble in 2000/2001 and the global financial crisis of 2008/2009. And although an increase in value of this extent is not be expected every year, global equities still have substantial further yield potential over the coming years.
Raiffeisen Global Growth invests in profitable companies
The Raiffeisen Global Growth fund invests primarily (at least 51% of its total assets) in equities or equity-equivalent securities issued by companies that are domiciled in, or whose operations are centred in North America, Europe or the developed countries of the Pacific Rim. Despite the fact that share prices have been rising for several years now, the managers of the fund are still finding high-margin companies at relatively attractive valuations. Currently, these are mainly concentrated in three industries: Healthcare, information technology and finance. The healthcare sector will benefit from the global trend towards an aging and growing population, which is demanding more products and services for treating disease and maintaining health. These trends are largely unaffected by the ups and downs of the global economy. Information technology, on the other hand, is the growth industry par excellence – it will continue changing people’s lives hugely in the coming decades. As for financial stocks, they are in a somewhat special position: they have so far only partially recovered from the global financial crisis of 2008-9 and are thus, in historical comparison, still relatively cheap. At the same time these are companies that would particularly benefit if interest rates were to rise again, as this could lead to a significant improvement in their profit margins.
Global equity investment for long-term asset accumulation and wealth preservation
Whoever wants to build their assets and preserve their wealth over the long term will, in the current low interest rate environment, find it hard to avoid investing – at least partially – in equities. While bond yields are increasingly tending towards zero and hence no more price increases are effectively possible, many stocks are paying dividend yields that alone are well above the yields attainable on the bond markets. Naturally, dividends are much more dependent on continued strong corporate profits and thus subject to greater risks than are, for example, interest rates on bonds. However, dividends, for their part, can also be raised, and there are many companies that have done so continuously over the course of decades. Added to this are possible capital gains on shares. For this reason, even if inflation rates were to rise slightly again, shares offer a much better chance of preserving capital in real terms than do bonds, for example – and rising inflation rates are, after all, the stated objective of the central banks!
That does not mean that share prices can only go up, of course, but from today’s perspective, whether there will be continued economic slowdown or an economic recovery, there are good arguments for global equity investments either way – despite the associated higher risks and the fact that capital losses cannot be ruled out.
This text is intended for representatives of the media. Despite careful research, the information contained herein is intended for information purposes only, and does not imply a commitment on our part. It is based on what was known to the authors at the time of writing and may at any time be changed without further notice by Raiffeisen Kapitalanlage GmbH. Past performance is not a reliable indicator with regard to the future developments of a fund. The contents of this document represent neither a solicitation to buy or sell nor an investment analysis. Further information can be found at www.rcm.at.
Raiffeisen Kapitalanlage-Gesellschaft m.b.H. is the asset management company of Raiffeisen Banking Group Austria and one of the leading domestic fund management companies. Currently (as at the end of April 2015), it has total assets under management of EUR 31.4 billion. The company is represented in major European markets and has been recognised time and again by rating agencies and the business press alike for the excellent performance and high quality of its funds. More information can be found at www.rcm.at.
For more information, please contact:
Raiffein Asset Management, Bulgaria
Phones: (+359 2) 91 985 626, (+359 2) 91 985 654
(+359 2) 91 985 467