Frequently Asked Questions

Mutual funds combine the capital from a large number of investors and invest it in equities, bonds and other securities (such as real estate and commodities). The investor buys shares in a basket of securities managed by professionals. In contrast to purchases of individual shares or bonds, success is not dependent on a single investment. The effect of a poor performance of one security can be absorbed by good performances by others.

More information.


The price or value (net asset value) of a fund unit varies over time. It is linked to the performance of the securities and assets held by the fund. The price is calculated daily.

The fund price already includes the management fee. However, the initial charge, which falls due at the time of purchase and the other fees, as for instance individual account and deposit fees, are not taken into account.


You can begin investing in fund units with very small amounts. The minimum amount is mentioned in the funds prospectus.

In general, you need a small sum to start investing in the national and international securities markets.


You can buy or sell all Erste Asset Management mutual funds on any day. The fund unit issue and redemption prices are calculated daily using objective and verifiable valuation methods.

The KIDs and factsheets offer you more detailed information on the respective mutual funds.


Mutual fund units are available from Erste Asset Management  and Banca Comerciala Romana units. Your advisor will be happy to help you choose the most suitable fund. You can view your portfolio of funds through internet banking - Click 24 Banking BCR (www.24banking.ro) and phone banking - Alo 24 Banking BCR. 


Our service is based on the "SRRI indicator", which ranges from 1 (low risk) to 7 (high risk). Please note that this indicator can change in the future. The SRRI indicator is valid for all ESPA funds distributed locally by SAI ERSTE Asset Management SA.

  • Low risk (SRRI*: 1-3)

This risk category contains investment funds with low volatility, i.e. for example fixed income funds with short remaining time to maturity, conservative mixed funds, and open-ended property funds.

  • Medium risk (SRRI*: 4)

This risk category contains investment funds with an SRRI value of 4 (SRRI according to the Key Investors Information Document KIID), which indicates a medium volatility level. The prices of these funds fluctuate by 5% to 10% p.a. Funds typically found in this category are mixed investment funds with higher equity thresholds as well as corporate bond funds.

  • Above-average risk (SRRI*: 5-7)

Funds with an SRRI of 5 and higher are said to contain above-average levels of risk. Investment funds with a volatility of at least 10% p.a. are in this category, e.g. pure equity funds.

 

ÖKB method

The fund performance according to the OeKB method (OeKB = Oesterreichische Kontrollbank AG) is established on the basis of the values calculated for each fund and provided by the asset management companies, bearing in mind dividends and splits. Neither taxes nor fees on top of the ones that have already been made an allowance for in the calculatory value are taken into account. The calculatory value does account for current expenses such as for example the management fee. Past performance is not indicative of the future development of the fund.

Simplified illustration. For details, please visit http://www.oekb.at.

 

*) Risk indicator ("SRRI indicator")

The "SRRI indicator" is used to allocate investment funds to one of three different risk categories (low risk, medium risk, above-average risk).  SRRI stands for "Synthetic Risk and Reward Indicator"  and is calculated in accordance with the rules issued by the Committee of European Securities Regulators.  This indicator forms an integral part of the Key Investor Document (KID) and states the fluctuation of the fund unit price on a scale from 1 to 7. 

Investment funds with a low SRRI typically exhibit less fluctuation and, hence, a lower probability of loss.  Funds with a high SRRI experience greater fluctuation as well as a greater risk of loss.

The fund category is not a reliable guide to future performance and may change over time.

 

A Category 1 rating should not be construed as indicating that the investment is free of any risk.Nor does the rating constitute a target or guarantee. The risk indicator (SSRI indicator) is stated separately for each of our funds.


SRRI indicator Risk categories Volatility intervals

1 Low risk  0%  to 0.5%
2  0.5%  to 2.0%
3 2.0%  to 5.0%

4  Medium risk 5.0%  to 10.0%

5  Above-average risk  10.0%  to 15.0%
6 15.0%  to 25.0%
7 At least  25.0%

How the SRRI indicator is calculated

Volatility (i.e. the degree of fluctuation in the price) is calculated on the basis of the weekly data (returns) for the investment fund over the last five years.  If the history of the investment fund is too short, the performance of a comparable asset or alternative methods stipulated by law can be used for calculating the SRRI.  In the case of a dividend payout, these are also taken into account.  Volatility as well as the SRRI as a risk indicator do not draw any distinction in the direction of the fluctuations but merely express its magnitude.  3.0% volatility, for example, means that the value of the investment fund has fluctuated by an annualised average of plus/minus 3.0% over the past five years.

Risks which are typically not taken into account by the risk category and are of significance for the fund include:

1.          Credit and counterparty risks:  Issuer or counterparty default may result in losses for the fund.  The credit risk describes the impact of any special changes with respect to the issuer in question liable to affect the price of a security alongside general trends in the capital markets.  Despite the care taken in selecting securities, it is not possible to rule out losses as a result of a sharp decline in the value of the issuer's assets. 
2.          Counterparty risk entails the risk of the party to a mutual contract failing to honour all or part of its obligations.  This applies to all contracts which are entered into for the fund's account. 
3.          Liquidity risk:  The risk that it may not be possible to sell, liquidate or close a position in the fund assets within a sufficiently short period of time and at limited expense with the result that the fund's ability to fulfil its redemption and payment obligations at all times may be impaired. 
4.          Operational risk:  The risk of the fund sustaining loss as a result of shortcomings in internal processes as well as human or system failure at the level of the management company or arising from external factors as well as legal and documentary risks and risks resulting from the trading, clearing and valuation processes performed for the fund. 
5.          Custody risk:  The fund may sustain a loss as a result of errors on the part of the custodian bank which holds the assets. 
6.          Risks from the use of derivatives:  The fund uses derivatives not only for hedging purposes but also as an active investment instrument. This exposes the fund to additional risk.

 

Risks to consider include:

  • The price of the securities held by the fund can fluctuate considerably (especially equity and alternative investment funds): you may lose your capital
  • Funds that invest in foreign currencies are exposed to exchange rate risk
  • Interest and payouts on securities are linked to the success of the issuer
  • Prices may fall in response to credit rating downgrades
  • Higher interest rates may cause prices to fall.

 


Mutual funds qualify as special funds. Even if the fund company or custodian bank were declared insolvent, the fund assets would not be considered part of the bankruptcy assets: they remain separate. In addition, fund providers are subject to constant monitoring and surveillance by the Financial Supervisory Authority (ASF) and external auditors.


In theory you can sell your fund units at any time. However, there are recommended minimum investment periods for each fund. The higher the risk, the longer you should hold onto fund units. We usually recommend a minimum investment period of 3 years for bond funds and 7 years for equity funds.