Collective investment and asset trust management market, the first quarter of 2008: Any ruble is good to catch

Money is totally absent: The first quarter of 2008 witnessed the stock market drop and frightened out even the most persistent investors. Optimistic expectations to enter the market in time of recession were followed by net attraction to open funds of 5 bln rubles in January, but February saw indecision (-165 mln rubles) and March was clearly negative (-2.4 bln rubles). April saw the final impetus drop - 3.2 bln rubles left the market within the first three weeks. Diagram 1. Management companies' asset development.

Presently management companies undergo a difficult period. To attract new funds and clients is not enough - you have to hold them for at least a year. A modern sharer is an active observer of his own investments and immediately says good bye to his management company in case of weak results. Administrative barriers like increased commissions for "untimely" departure (less than a year) from a unit investment fund and advertisement "promises" to get profit in several years no longer work. Improved asset management, extended investment strategies, information transparency, access for sharers, maximum risk control may be of practical help. In general, management companies should be more professional.

State corporations: new hope. Despite all retail segment drawbacks, the asset management market may still swing up. Free funds of existing and future state corporations - OAK, United shipbuilding company, Olimpstroy, Rosatom, Rosnanotech, Fund in support of housing and public utility reform, Avtodor, Bank of Development, Rostechnologies - should foster the growth. A precedent was set by Troika-Dialog winning Rosnanotech tender to become a financial advisor in placing temporary free funds amounting to 130 bln rubles (the figure exceeds all assets in Troika management. In May housing and public utility state corporation plans to start passing its free assets (about 200 bln rubles) to a management company. Enormous state corporation budgets and slow use of the funds allow management companies to expect to be involved in cutting a state investment pie together with banks, where free money lies in wait so far.

Slowing down. According to our assessment, the asset trust management market made no forward steps in the first quarter of 2008. New asset influx was insufficient, stock market indices were non-descript and caused losses, new fund registration was hindered and made closed funds - former market drivers - disinterested. By the end of 2007 the asset trust management market was assessed to near 1.8 trln rubles, by the end of the first quarter of 2008 - at most 1.9 trln rubles. So the market quarterly increment averaged 5.5%. The market structure was a bit changed due to influx of 130 bln rubles from Rosnanotech. As a result assets of unit investment funds amounted to 32% of the market, assets of non-state pension funds - 31%, and individual and other types of trust management - 32%. The remaining 5% come from military mortgage, reserves of insurance companies and accruals of the Pension Fund of Russia in asset management.