What is OFBU
Posted on Nov 18, 2000 08:15:27 AM
Even conservative investors who value a bank deposit for his relatively reliable, are not always to the liking of the relatively small yield of the instrument. Especially in a situation where inflation is putting it mildly, is palpable, and the stock market has the potential to provide higher interest rates. That clients would not go to the brokers, bankers have recently started offering them to invest through a bank, but the stock market instruments. This form is called the general funds of bank management (OFBU).
In contrast to the usual deposit OFBU does not imply a fixed income – the amount of payments depends entirely on the profitability of investments. However, according to the Association for the Protection of Investors’ Rights Information (AZIPI), last year almost all the funds of bank management to ensure greater profitability than on deposits.
In fact, banks began to create OFBU since 1997 – while the market there were about 120 funds. But then it happened the 98th. Says deputy executive director Orgbanka Alexander Fatkina, “now this form of investment again recreated as there are many willing to give their money in trust, primarily to the stock market (the people have decided to entrust their money to professionals, especially after the fall of stock prices in May -June 2004). Enter into the same trust agreement for an amount less than 300 thousand rubles for the bank is not profitable. ”
OFBU is a form of collective investment schemes, but, unlike the mutual fund is a type of banking product. The Bank acts as a fund manager – to invest client’s funds, not only in securities (such as mutual funds), but also currency, precious metals, other financial instruments. Accounting Operations OFBU regulated by the Central Bank, so that eliminates the use of bank fund for their own purposes. Department provided the funds held in trust, in its own banking portfolio. Investing client OFBU in securities of the bank and its subsidiaries is prohibited. Commercial bank, has created OFBU can use the services of its own depository and has no obligation to engage the independent auditor and assessor. On the one hand, reduces costs, but on the other – makes the fund less transparent and reduces investor protection.
Structure of Investment Portfolio OFBU prescribed in the investment declaration, drawn up for a specific fund. Typically, the bank creates several funds with different strategies. For example, the Ural Bank for Reconstruction and Development established a few days ago the regular funds of bank management – “Basic industry”. This fund invests in shares of the founders of enterprises of key industries. Revenues generated by the growth of the market value of the acquired shares and dividend payments, the amount of which in recent years has tended to increase.
agent, bank, fund, management, mutual fund,- Private Wealth Management
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