Cyprus & World News

BOCY, BNP target pension funds with low-risk MFs

21 March, 2014

BNP Paribas Investment Partners and Bank of Cyprus have launched eight open-ended sub funds under the BNP Paribas Plan Easy Future brand, aimed at both retail investors as well as corporates, mainly as alternatives to defined-benefit products for pension funds.

The eight products offer an annual return with a range of 1.50% to 4.43%, significantly higher than the level of low-risk interest rates, and maturity in 2018, 2021, 2023, 2026, 2028, 2033, 2038 and 2043.
With subscription fees set at a maximum of 5.25%, ongoing annual charges range from a maximum 1.50% to 1.85% for retail investors and 0.90% to 1.05% for ‘Privilege’ subscribers who invest EUR 1 mln or higher. They all carry a protected minimum net asset value (NAV) at maturity.
Christian Dargnat, CEO of BNP Paribas IP, said that despite the muted economic growth in Europe, there is generally great potential for mutual funds, as only 50% of the wealth of all European is invested in cash and deposits, and less then 10% in mutual funds.
The rate in the U.S. is close to 90% invested in mutual funds which makes America a mature market and very difficult to break into, Dargnat said.
“All across Europe, we need growth to invest, to raise capital, to deposit in savings,” he said, adding that “our mission as asset managers is to manage our clients’ money. We are acting on their behalf.”
Dargnat said that as the world is turning from ‘defined benefit’ pension arrangements to ‘defined contribution’ in order to safeguard a generous return upon the investor’s retirement, these products by BNP PIP are becoming very popular among corporates that are concerned about the problematic finances of many countries that manage national pension funds.
Six of the eight funds under the BNP Paribas Plan are registered by the Cyprus Securities and Exchange Commission and two more are pending approval. The Plan is a UCITS IV SICAV registered in Luxembourg and managed by THEAM, the asset manager arm of the BNP PIP. All sub-funds are already available in Germany, Austria, Belgium, Spain, France, Italy, Luxembourg and the Netherlands.