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Mutual funds from BCC Invest are a profitable solution for investments
20-11-2024
Mutual Fund Yields Exceed Bank Deposit Rates and Global Bond Indices
BCC Invest’s Mutual Funds show record returns over the last 12 months, outperforming both market benchmarks and deposit rates offered by the country’s banks.
Over the past 12 months starting from September 30 last year, the yield of the “CenterCredit – Razumny Balance” Mutual Fund in KZT is 28.57%, “CenterCredit – Valutnyi” Mutual Fund’s yield for the same period is 24.21 % in USD, and the BCC Elite Mutual Fund demonstrated a yield of 16.64% per annum in KZT.
Such results were made possible by the strategic focus chosen by the Fund managers. The main idea of the investment strategy is to fix the high yield of bonds (KZT, USD-denominated) for the medium term.
What are mutual funds?
Mutual Funds are funds that pool money of multiple shareholders (investors). The Fund is managed by a team of professional managers focused on achieving the Fund’s investment goals. The Fund investors receive a unit – a security certifying the ownership right to a share in the Fund’s total assets equivalent to the size of their investments.
Mutual Funds Market in Kazakhstan
According to the Agency for Regulation and Development of Financial Market, the total assets of mutual funds as of July 2024 amount to KZT 288.3 billion, which is only 0.4% of Kazakhstan’s GDP. For comparison, this figure in Russia is 8.5%, and in the United States – 140%. An interesting case is demonstrated by India, where the ratio of fund assets to the country’s GDP increased from 10.9% in 2020 to 17% at the end of 2021 amid the rapid growth of the local stock market.
According to the experience of other countries, the share of funds’ penetration into the market can be significantly higher, therefore, funds have a great potential for multiple growth in Kazakhstan.
“CenterCredit – Valutnyi” Interval Mutual Fund
The yield of the USD-denominated “Valutnyi” Fund over the past 12 months as of 30 September 2024 is 24.21%. The Fund is ahead of industry benchmarks in terms of profitability.
The Fund’s net asset value is $46 million, up by 36.5% since the beginning of the year.
The Fund includes Eurobonds of Kazakhstan and Kazakhstani corporations, as well as Eurobonds and shares of leading companies in their industries from the USA, Europe, Latin America and Southeast Asia. Over 75% of instruments in the Fund’s portfolio are instruments rated BB and higher, in particular, bonds rated BBB and higher make up 64.27% of the portfolio.
The Fund not only demonstrates high returns, but also regularly pays dividends to its shareholders (in the amount of 1.25% of the current share value). Thus, investors can earn income not only from the difference between the amount of investments at the entrance and the amount received from the sale of the fund units, but also through the payment of dividends.
The key point in formation of the Fund’s portfolio by managers was the choice of Investment Grade debt instruments with high credit quality.
“CenterCredit — Razumny Balance” Interval Mutual Fund
In the last 12 months as of 30 September 2024, the “Razumny Balance” Mutual Fund’s yield amounted to 28.57%.
The Fund’s net asset value is KZT 5.9 billion. The Fund’s portfolio is 80% bonds with a weighted average coupon rate above 13.5%. The portfolio is almost 90% composed of Kazakhstani instruments.
“Many investors want to enter the corporate and sovereign debt market of Kazakhstan having attractive high rates, but they do not know how to choose the right issuers, what optimal portfolio to choose and how to insure themselves against the risk of default. We provide our Fund’s unit-holders with the opportunity to enter the market by receiving an exposition for the best and most reliable instruments collected in a portfolio, which is actively managed by experienced stock market professionals”, explains Maulen Usenov, Head of BCC Invest’s Asset Management Group.
“BCC Elite” Mutual Fund
The Fund is focused primarily on corporate customers providing their free KZT liquidity to save funds and generate investment income higher than from bank deposits.
80% of the Fund assets are cash which is regularly placed at high rates in repos.
Market Development Forecasts
All mentioned mutual funds are listed on KASE, and investors can easily buy and sell units through the Exchange at any time. You can track the dynamics of your investment portfolio, as well as buy and sell fund units via BCC Trade mobile app, as well as via Bank CenterCredit’s mobile app called BCC.kz.
“Mutual Funds are our anchor product and in the future we plan to expand our product line, improve customer experience across e-channels. Our mid-term objective is to attract people who open deposits to consider investing in mutual funds”, shares Artem Malykh, Manager of BCC Invest Product, about their future plans.
“Mutual Funds are now the most convenient investment product for a wide range of investors, including those who are just starting to invest in the stock market. Given the collective nature of funds, access they provide to a wide, diverse pool of tools, and active management of the fund's portfolio by a team of experienced professionals, investors can expect a relatively high returns, avoiding the main risks of self-investment”, stated Ruslan Zerilov, BCC Invest Managing Director.
More information about the Company’s mutual funds can be found on the bcc-invest.kz website, Products section or by calling at 303.
State License for carrying out activities in the securities market No. 3.2.235/12 dated 10 July 2018.
