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10May2005
ADVANCE INVEST – 1-year anniversary
On May 10, 2005 Advance Invest Mutual Fund – managed by Karoll Capital Management – celebrates its 1st year anniversary since the start of the public offering. It has been a year full of dynamism, challenges, and most importantly – many successes.
For just one year Advance Invest turned into one of the largest Bulgarian funds with assets of nearly BGN 16 mln. The total assets of all 6 domestic funds amount to BGN 60 mln, thus Advance Invest holds a 26% market share. All forecasts èíäèöàòå that this is just the initial phase of development. Bulgarian households are just now starting to allocate their savings toward mutual funds as an alternative to traditional savings schemes such as bank deposits. The expectations are that by year 2007, not less that 3% of household assets will be invested in funds like Advance Invest, which means that at the time Bulgaria joins the European Union, the mutual fund industry will manage over ½ bln in assets. Further, significant investments are expected from foreign investors who see solid potential in the region.
By all means, the most important measure for a fund's success is the return it realizes for its shareholders. For the past 1 year – since May 10, 2004 to May 10, 2005 – Advance Invest recorded a return of 66.67% (tax-free). It is important to compare this result to the performance of the benchmark – SOFIX, the official BSE index. For the same 1-year period, SOFIX rose by 62%. This additionally underscores the fund's success. Not the least, the Morningstar rankings of all rated funds worldwide reveal that the highest return for the period is 58.69%.
From the very start, Advance Invest was conceived as a regional product focused on Eastern Europe, rather than Bulgaria alone. To this respect, the latest news for our shareholders is that the fund's first investment beyond Bulgarian borders will be the purchase of Romanian stocks. To start with, around 10% of the fund's assets are allocated to Romania. Soon Advance Invest will enter other regional emerging markets with high upside potential.
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ADVANCE INVEST is the first Bulgarian open-end mutual fund focused on East European stocks. The key objective is to seek long-term capital appreciation through investment in equity securities. The primary investment focus is stocks listed on the Bulgarian and other East European markets with high growth potential. The fund's investment strategy is based on active portfolio management through the selection of undervalued equities with high upside potential. Depending on the market outlook, a fraction of the fund's assets may be invested in fixed-income instruments – mainly high-yield corporate and mortgage bonds.
