A new financial instrument – the Exchange Traded Fund (ETF) – which was introduced this Wednesday at BVB trades by brokerage house Tradeville allows beginner investors to build a diversified portfolio at the Bucharest Stock Exchange (BVB) in a deal worth just RON 5.
By acquiring one ETF unit for the initial price of RON 5, investors get an exposure to the 10 top-liquid shares that make up the BET index, with the same structure as that of a portfolio built by purchasing these shares in the market, in match with the issuers’ weight in the BET and observing the minimum block trade size, which would otherwise require a minimum amount of RON 7,000 plus (about 1,569.5 euros at the current exchange rate – Ed. note).
According to BVB president Lucian Anghel, the BET index, the performance of which will be tracked by ETF, increased 11% since early this year, which would stand for an annual return of 16%.
„ETF BET Tradeville is a financial instrument dedicated to investors who don’t have time to build and pursue a portfolio of their own. Also, the fund is fit for those interested in stock market trading but lack the necessary amounts for a diversification similar to the BET.
Building a minimum portfolio to replicate the BET with the same weights and minimum block trading size requires RON 7,140.95, but by acquiring ETF BET Tradeville units, investors get the equivalent exposure in one transaction, worth RON 5,” Tradeville general manager Mihaela Biciu said on Wednesday at the opening of the trading session.
ETF is useful not only for beginner investors who have difficulty in understanding stock market risks, and for investors with only small available amounts, but also for institutional investors – investment funds, pension funds, for the portfolio management strategy, for above-market performance, said Dragos Darabut, general manager of Vanguard Asset Management, the company that manages ETF BET Tradeville.