Advance Eastern Europe
| Basic Facts | |
|---|---|
| Mutual fund type: | Open-end equity fund |
| Investment focus: | Eastern European emerging markets |
| Country of registration: | Bulgaria |
| ISIN: | BG9000016063 |
| Currency: | EUR |
| Subscription fee: |
|
| Redemption fee: | 0% |
| Management fee: |  2.5% of NAV p.a. |
| Launch date: | 04.10.2006 |
| Minimum investment: | 1 share (with EUR 1 par) |
| Asset Management Co.: | Karoll Capital Management |
| Portfolio manager: | Alexander Nikolov |
Investment Objective
The investment goal of the Mutual Fund is to ensure high investment results sustainable over time through a long-term growth of the value of its investments.
Investment Strategy
The investment strategy is based on the assumption that the emerging markets in Eastern Europe have a long-term growth potential (in the range of over 5 years) in view of the fact that they are still at the beginning of their development and the macroeconomic environment and the legislation are constantly improving. The followed strategy is based on the so-called top-down approach where the main decision is the asset allocation among the different markets in the portfolio. The investment strategy can be defined as fairly active since the Asset Manager reviews its expectations about the different markets and the major stocks on each market between 2 and 4 times per year. Consequently, one can expect small or more substantial changes in the fund’s portfolio with that frequency.
At present the Fund invests in the markets of 6 countries in the region: Bulgaria, Romania, Croatia, Serbia, Russia and Ukraine. If the market conditions change, the Fund could also invest in markets such as Macedonia, Montenegro, Bosnia and Herzegovina, Lithuania, Latvia, Hungary, Czech Republic, Poland and others.
Having this investment strategy that under normal circumstances the Fund invests mainly (over 75% of its assets) in shares of large companies included in the main stock-exchange indices of Bulgaria (SOFIX), Romania (BET), Serbia (BELEX-15), Croatia (CROBEX), Russia (MICEX and RTS) and Ukraine (PFTS). About 10-15% of the assets are expected to be invested in shares which do not participate in the above-mentioned main stock-exchange indices, but which have a long-term growth potential. About 10-15% of the Fund’s assets are expected to be held in cash or cash equivalents in order to ensure liquidity.
Investment Risks
Advance Eastern Europe is a medium to high-risk fund, which means that it is very likely for the fund price to be highly volatile. This is because of the fact that investments in the Eastern European markets are associated with greater risks than the ones in the West European and US markets. The risks can be divided in market risk, foreign exposure risk, political, currency, and liquidity risk as well as risk associated with investment models, and so on. That's why the asset manager believes that the fund is appropriate for investors looking for high return in the long run, but are ready to assume the risk of substantial short-term price volatility. The asset management company recommends an investment horizon of 5 to 8 years.
Investors must first review the investment objectives, risks, and fees before investing in the fund. Please read the fund's prospectus carefully before making the decision whether to invest.
Risk statement
The value of units of Advance Eastern Europe and the income from them can go down as well as up, profits are not guaranteed, and investors assume the risk that they may not recover the full amount of their investment. Investments in the mutual fund are not guaranteed by a state guarantee fund or any other institution. Past performance of the fund should not be viewed as a guide to future performance.