Raiffeisen Asset Management

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1 Monthly bulletin Raiffeisen Asset Management (Bulgaria) EAD is owned by Raiffeisenbank (Bulgaria) EAD as part of Raiffeisen Group - a leader in financial services in Central and Eastern Europe. The company is licensed by Bulgarian Financial Supervision Commission with a Decision 7-УД/ and works in close cooperation and in accordance with the highest standards of Austrian management company Raiffeisen Capital Management. Raiffeisen Asset Management manages the largest bond fund in Bulgaria Fund "Raiffeisen Conservative Fund Bulgaria" as well as the largest mixed conservative fund "Raiffeisen Active Protection". The responsibility towards investors and their interests is the basis of any investment decision. This principle is fundamental to our business. The Company adheres to the following priorities in management: Strong performance of the funds and protection of investors interests Establish and maintain long-term relationships with investors Trust, reliability, stability, transparency and constructiveness Proactivity, flexibility, innovation Adherence to the corporate culture of the Group's highest standards and best practices for the industry Implementation of strict rules and policies for risk management in the investment proces Raiffeisen Asset Management (Bulgaria) EAD is the first asset management company in Bulgaria to offer a combination of local and foreign funds in order to provide customers with the opportunity to invest in diversified portfolios of financial instruments. The Company organizes and manages four local funds (three of which are the first Feeder funds, registered in Bulgaria) and distributes eleven funds managed by Raiffeisen Capital Management, Vienna. Funds managed byraiffeisen Asset Management / Bulgaria / EAD Funds managed by Raiffeisen Capital Management in Vienna 1. Raiffeisen (Bulgaria) Conservative Fund 1. Raiffeisen Global Bond 2. Raiffeisen (Bulgaria) Global Growth 2. Raiffeisen Sustainable Mix 3. Raiffeisen (Bulgaria) Active Protection in EUR 3. Raiffeisen European SmallCap 4. Raiffeisen (Bulgaria) Global Mix 4. Raiffeisen Global Equities 5. Raiffeisen Eastern European Equities Other products 6. Raiffeisen Eurasia Equity Fund 1. Individual Investment Plan 7. Raiffeisen Emerging Markets Equity 2. Deposit Mix 8. Raiffeisen Russia Equities 9. Raiffeisen Energy Equities 10. Raiffeisen Active Commodities 1

2 Index Changes Change Comment Europa Dow Jones Euro Stoxx % FTSE % DAX % USA Dow Jones % S&P % Nasdaq % Bulgaria SOFIX % BGBX % BG REIT % BG TR % Commodities Gold % Oil % Govt. bonds US 10y 2.12% 2.29% -0.18% US 5y 1.70% 1.84% -0.13% DE 10y 0.36% 0.54% -0.18% DE 5y -0.34% -0.18% -0.16% Index Money market LEONIA -0.40% -0.40% 0.00% SOFIBOR -0.09% -0.09% 0.00% EURIBOR -0.33% -0.33% 0.00% Източник: Bloomberg. RAM Market share The traditionally quieter summer period was rudely interrupted by an upsurge of political risk led by mounting US-North Korea tensions and terrorist attacks in Spain that triggered investor nerves, boosting volatility and pushing some market returns into negative territory. However, macroeconomic data was very positive, with stronger-than-expected growth registered in many countries including Europe, UK, Japan and Brazil, confirming that the global recovery remains solid. Developed market equities ended the month with a slight increase of 0.2%. Meanwhile, emerging markets registered a more positive performance, returning 2.1% thanks to a weak dollar and positive fundamentals in China. Global bonds performed well, with a 1.0% return driven by a broad-based contribution from almost all fixed income asset classes. In Bulgaria local government bond market maintained the pace. 2

3 Raiffeisen Conservative Fund Bulgaria Raiffeisen Conservative Fund Bulgaria (former Raiffiesen (Bulgaria) Liquidity Fund ) starts public offering of units in March The fund invests up to 100% of its assets in government debt, issued and/or guaranteed by the Republic of Bulgaria, with maturity of up to 5 years; up to 10% in corporate bonds of Bulgarian issuers; no less than 5% in cash and bank deposits with maturity of up to 12 months. Yield % Risk % YTD 0.86% St. Dev (daily) 0.030% 6 months 0.56% St. Dev (yearly) 0.43% 1 year 0.90% Sharpe ratio years 1.82% Positive months years 8.65% Negative months 10 Since inception* 3.67% SRRI 2 Net Asset Value per unit The investment purpose of the fund is to realize capital gains by taking low to moderate risk. Conservative Fund Bulgaria BLOOMBERG code RAMMMKT BU BG BGN Total NAV NAV/ Unit Shares outstanding Date of IPO Nominal Value Subscription fee % Redemption fee For investments over 12 months % for investments under 12 months % Management fee up to 0.50% Current management fee from 01/07/ % Minimum investment BGN 30 Recommended investment horizon Minimum 2.5 years Structure of the fund by asset classes Value in BGN % of the portfolio Cash % Deposits % Govt Debt % Total % As of over 73.8% of the fund s NAV is invested in Bulgarian Government Bonds. In August the portion of the Eurobond sovereign debt was increased by 1% from the NAV. The deposit weight was also increased to 14.8%. Modified Duration of the fund is 2.21 yrs. Yields by months for the last five years % y/m I II III IV V VI VII VIII IX X XI XII

4 Raiffeisen (Bulgaria) Active Protection is established on 25 Nov 2015 after the transformation of Raiffeisen (Bulgaria) Fund Protected Investment in Euro into a Feeder fund. The fund invests constantly at least 85% of its assets in units of Raiffeisen Euro- Click Master fund, organized and managed by Raiffeisen Capital Management Austria. The rest of the portfolio is kept in cash. The main purpose of the Master fund is to protect at least 90% of the highest historical NAV per unit achieved. The investment purpose and policy, including the risk profile and the return of the Master and the Feeder funds, are identical. Raiffeisen (Bulgaria) Active Protection Feeder Fund Net Asset Value per unit Yield % Risk - YTD -0.01% St. Dev (daily) 0.13% 6 months -0.84% St. Dev (yearly) 2.05% 1 year -0.43% Sharpe ratio years 0.34% Positive months 71 5 years 1.10% Negative months 19 Since inception* 2.34% SRRI 3 Active Protection in euro BLOOMBERG code RAFBUCP BU BG EUR Total NAV NAV/ Unit Shares outstanding Date of IPO Nominal Value Subscription fee 0.00% Redemption fee for investments over 12 months % for investments under 12 months % Management fee up to 1.00% Current management fee 0.75% Minimum investment 200 EUR Recommended investment horizon 5 years Structure of the fund by asset classes Value in EUR As of % from fund s NAV is invested in Master fund Raiffeisen Euro-Click. Cash exposure is 3.4% from the fund s NAV. % of the portfolio Cash % Investments % Total % Yields by months for the last five years % y/m I II III IV V VI VII VIII IX X XI XII

5 Raiffeisen-Euro-Click Master Fund "Raiffeisen-Euro-Click" offers a protection model, which aims to preserve 90% of the highest NAV per unit of the fund achieved historically. This value is subject to a constant correction in case there is a new high in the fund s NAV per unit. "Raiffeisen-Euro-Click" invest its assets in two types of components component that ensures stability (deposits, money market instruments, bonds, funds investing in bonds) (mainly in bonds, bond funds or equity funds investing in shares) Raiffeisen-Euro-Click AT0000A1G7D6 EUR Total NAV NAV/ Unit Shares outstanding Date of IPO Nominal Value 100 SRRI 3 Recommended investment horizon 5 years Bond Ratios* Ø Duration (Next call) 0.32 Ø Modified Duration (Next call) 0.32 Avg. Yield to Maturity 0.05 Avg. Yield next call 0.04 Avg. Coupon 0.36 Avg. Rating A Fund structure by asset class Bonds Dev eloped Markets 9.2% Bonds Emerging Markets 12.7% Inflation-Linked Bonds 12.5% Corporate Bonds 18.8% Equities Euro/Europe 1.9% Equities Non-Euro/Global 4.5% Equities Emerging Markets 3.5% Commodities 10.2% Currencies -6.4% Cash 33.0% Total 100.0% Largest positions: Raiffeisen-Euro-ShortTerm-Bonds (R) T 10.3% LYX ETF EUROMTS INFL IG DR 10.1% Raiffeisen Sustainable ShortTerm (I) T 9.9% ISHARES JPM USD EM BND EUR-H 4.6% BLACKROCK GI-EMMK GV BD-A2 4.2% AMUNDI ETF US TREASURY % ISHARES USD TIPS 3.4% ISHARES EM LOCAL GOVT 3.3% ISHARES CORE EM IMI UCITS ET 2.9% AMUNDI-IND BD EURO CORP-IEC 2.2% In the course of the month, the dynamic model reallocated out of equities, which had lost their momentum over the summer months, into bonds, which demonstrated positive performance thanks to the political risks and expectations that inflation will remain tame. In the weeks of August up to now performance was mildly positive, driven by the ongoing recovery in commodities and bonds. Markets were recently driven more by political factors, whilst the central banks are working to ensure calm conditions. Most of the fundamental data continued to be positive during the period. However, one noteworthy development was that the data are no longer triggering any increases in prices on the equity markets. This is frequently a sign for somewhat higher volatility on the markets. In seasonal terms, we are also approaching the hardest part of the year as September is traditionally marked by volatility. ( ) 5

6 Raiffeisen (Bulgaria) Global Mix Feeder Fund Raiffeisen (Bulgaria) Global Mix is a Feeder scheme, which invests 85% or more of its assets in shares of Raiffeisen Security (Raiffeisen - Sicherheit) Master collective investment scheme, which is organized and managed by Raiffeisen Capital Management Austria. Raiffeisen Global Mix Fund is a Feeder scheme, which invests 85% or more of its assets in units of Raiffeisen Security (Raiffeisen - Sicherheit) Master collective investment scheme, which is organized and managed by Raiffeisen Capital Management Austria. The rest is kept in cash. The Fund starts public offering of its units The investment objective of the fund is realizing capital gains while taking low to medium risk. Yield % Risk - YTD -0.30% St. Dev (daily) 0.21% 6 months 0.60% St. Dev (yearly) 3.27% 1 year -0.26% Sharpe ratio years - Positive months 8 5 years - Negative months 9 Since inception* 0.93% SRRI 3 Net Asset Value per Unit Raiffeisen Global Mix BG EUR Total NAV NAV/ Unit Shares outstanding Date of IPO Nominal Value 1 Subscription fee 0.00% Redemption fee for investments over 12 months % for investments under 12 months % Management fee up to 1.75% Current management fee from 01/07/ % Minimum investment 200 EUR Recommended investment 5 years horizon Structure of the fund by asset % of the Value in EUR classes portfolio Cash % Investments % Total % As of % from fund s NAV is invested in Master fund Raiffeisen Sicherheit. Cash exposure is 4.8% from the fund s NAV. Доходност за последните пет години по месеци % г/м I II III IV V VI VII VIII IX X XI XII

7 Raiffeisen Sicherheit Master Fund Raiffeisen-Fund-Security is a mixed fund of funds. It pursues an investment goal of moderate capital growth and mainly invests (at least 51% of its fund assets) in units in investment funds. Units in equity funds may not exceed 35% of the fund s assets. Units in investment funds are mainly selected on the basis of the quality of the investment process, their performance to date and their risk management. In addition to investment funds, the fund may also invest in securities, in bonds and money market instruments issued by sovereigns, supranational issuers and/or companies etc. and in sight deposits and deposits at notice. AT (VTA) EUR Total NAV NAV/ Unit Shares outstanding Date of IPO Nominal Value 100 SRRI 3 Recommended investment horizon Bond Ratios Raiffeisen-Sicherheit 5 years Ø Duration (Next call) 3.43 Ø Modified Duration (Next call) 3.40 Avg. Yield to Maturity 0.94 Avg. Yield next call 0.91 Avg. Coupon 1.61 Avg. Rating А Fund structure by asset class Bonds Dev eloped Markets 48.6% Bonds Emerging Markets 4.3% Inflation-Linked Bonds 4.7% Corporate Bonds 19.7% Equities Euro/Europe 3.2% Equities Non-Euro/Global 3.9% Equities Emerging Markets 4.7% Commodities 3.0% Currencies 0.0% Conv ertible Bonds 0.0% Cash 7.9% Total 100.0% Largest positions: Raiffeisen Euro Bonds (R) T 12.9% Raiffeisen Euro Gov. Bonds A 6.7% Raiffeisen-Euro-ShortTerm-Bonds (R) T 6.1% Raiffeisen Euro Corporates T 4.4% Raiffeisen US Equities (R) A 4.4% Raiffeisen Treasury Zero II A 4.0% Raiffeisen-GlobalAllocation-Strategies 2.0% Raiffeisen European Equities (R) T 1.9% BGF-EURO BOND FUND-EUR D2 1.5% SCHRODER INTL EURO BOND-C AC SCHE 1.5% At the end of July, the position in equities was reduced further. In turn, USD was bought. Within the equities segment, Emerging Markets and Japan continue to be preferred over the global established markets. In the bond segment, the position in inflation-linked US bonds was sold. Investment in Emerging Market bonds and high yield bonds was reduced during the past month. Markets were recently driven more by political factors, whilst the central banks are working to ensure calm conditions. Most of the fundamental data continued to be positive during the period. However, one noteworthy development was that the data are no longer triggering any increases in prices on the equity markets. This is frequently a sign for somewhat higher volatility on the markets. In seasonal terms, we are also approaching the hardest part of the year as September is traditionally marked by volatility. ( ) 7

8 "Raiffeisen (Bulgaria) Fund Global Growth" started its activities on the merger of three mutual funds "Raiffeisen Equity Fund", "Raiffeisen Balanced Fund" and "Raiffeisen Balanced Dollar". On , the fund is converted into a feeder collective investment scheme which invests 85 percent or more of its assets in units of mutual fund "Raiffeisen Global Equities" - Main collective investment scheme organized and managed by Raiffeisen Capital Management - Austria. Raiffeisen (Bulgaria) Fund Global Growth Feeder Fund Net Asset Value per Unit Yield % Risk - YTD 0.56% St. Dev (daily) 0.64% 6 months -2.97% St. Dev (yearly) 10.12% 1 year 6.55% Sharpe ratio years 2.26% Positive months 34 5 years - Negative months 21 Since inception* 4.35% SRRI 5 Global Growth BG BGN Total NAV NAV/ Unit Shares outstanding Date of IPO Nominal Value 1 Subscription fee 0.00% Redemption fee for investments over 12 months % for investments under 12 months % Management fee up to 2.9% Current management fee 2.20% Minimum investment BGN 30 Recommended investment horizon 10 years Structure of the fund by asset % of the Value in BGN classes portfolio Cash % Investments % Total % As of % from fund s NAV is invested in Master fund Raiffeisen Global Equities. Cash exposure is 4.5% from the fund s NAV. Yields by months for the last five years % y/m I II III IV V VI VII VIII IX X XI XII

9 Raiffeisen Global Equities Master fund Raiffeisen Global Equities was established on , the Fund invests primarily in global equities, with a regional focus on North America, Europe and Japan. The main objective of the Fund is long-term capital growth by taking a - high risks. Preferred are companies with attractive fundamental results. In addition, sectoral and geographical selection of stocks provide broad diversification. The fund is aimed at investors wishing to benefit from the receipt of high incoe investing in stocks, while knowingly take the risk of significant exchange rate fluctuations (movement of stock prices and exchange rates.) Raiffeisen Global Equity AT (VTA) EUR Total NAV NAV/ Unit Shares outstanding Date of IPO Nominal Value 100 SRRI 6 Recommended investment horizon 10 years Fund structure by MSCI sectors Financials 21.00% Information Technology 20.13% Consumer Discretionary 10.53% Health Care 10.26% Consumer Staples 8.58% Industrials 8.56% Materials 7.52% Energy 4.54% Utilities 2.78% Real Estate 2.20% Telecommunication Serv ices 2.11% Cash 1.24% n.a. 0.57% Total % Top 10 equities positions: Alphabet Inc 2.49% Facebook Inc 1.78% Citigroup Inc 1.75% Microsoft Corp 1.69% Thermo Fisher Scientific Inc 1.65% Samsung Electronics Co Ltd 1.62% AIA Group Ltd 1.57% Asahi Breweries Ltd 1.55% Cigna Corp 1.51% UnitedHealth Group Inc 1.48% Fund structure by issuer country United States 53.52% United Kingdom 7.32% Spain 4.75% Japan 4.72% Hong Kong 4.19% France 3.46% South Korea 3.31% Germany 3.30% Canada 2.82% Denmark 2.48% Others 10.12% Total % The fund s performance was negative during the reporting period. The main factor behind this performance was negative contributions from the fund s selection of securities in the regions Emerging Markets and Europe ex UK. Contributions from the investments in Cummins and Apple were among the weakest by individual securities. There were no changes in the portfolio. Economic activity remains very robust. Corporate earnings underline the positive path that the global economy is currently taking. Nevertheless, some indicators are at levels which suggest a mild overheating of the markets. Consequently, a temporary consolidation is quite possible in the coming weeks. ( ) 9

10 DEPOSIT MIX What is Deposit Mix? Deposit mix is a combination of a standard term deposit Raiffeisenbank (Bulgaria) EAD and investment in a mutual fund Organized and managed by Raiffeisen Asset Management (Bulgaria) EAD. Basic parameters of Deposit Mix Term - 12 months. - lev or euros. Minimum detection BGN or EUR. Distribution: The amount deposited is distributed 70% of the amount imported in term deposit and with 30% of the amount is purchase t shares funds of RAM. Return: Interest "MIX deposit" is formed as: the interest rate at 12 month standard term deposit in BGN, EUR is margin of 0.10% (see section TABLE with current interest rates under official interest rates bulletin of Raiffeisenbank (Bulgaria) EAD). Term/ currency BGN EUR USD 1 years 0.05% 0.05% 0.01% Advantages of Deposit Mix 70% of the sum is guaranteed by the Act to guarantee deposits in banks 0.10% Surcharge on standard deposits in BGN or EUR; 30% can be distributed in more than one fund chosen by the customer; Ability to Convert further return, Depending on the risk profile of the chosen fund or combination of funds on RAM/RCM; The deposit and the fund can be in different currencies. Example Deposit Mix: Client: Ivan Ivanov Ivanov Amount: The customer has available BGN and is interested in Deposit MIX The money is allocated as follows: BGN (70%) opens one-year deposit at 0.05 % interest /in BGN and EUR/+ 0.10% bonus BGN (30%) subscribe units of a selected fund 10

11 Individual Investment Plan What is IIP? Scheme periodically investing funds to investors in their chosen mutual fund, depending on their objectives and willingness to take risk. The client alone fix the contribution rate at a certain level equal to or higher than the minimum amount for investment. Scheme, which is not bound by time, customers are free to determine the frequency and the date of their investments. Periods of investing can be 1 and 3 months, the most common option each month. The client receives income from investment that accumulates in the price of the acquired shares. He can withdraw their money back at his wish, it is not limited by time. Upon withdrawal of some or all of the accumulated amount at a time, EPI does not cease. It may be terminated by the customer or in the event that four consecutive months unavailable the client's account to be accomplished investment. Along with the contract for EPI, the client signs an agreement for direct debit. Thus EPI does not involve investor with a visit to the office of the bank or the management company in each investment Who can invest? The product is suitable for individual investors and legal persons or institutional investors. What is the minimum amount to invest? The minimum investment for the funds organized and managed by Raiffeisen Asset Management (Bulgaria) EAD is 30 lev/ 30 depending on the currency of the fund. The minimum investment for the funds organized and managed by Raiffeisen Capital Management, Austria and distributed in Bulgaria is 30 euros. The customer can specify other amount that is above the specified minimum. How to implement your Sign a contract for the Individual Investment Plan. Identify the fund, which will invest. Your investment is not bound by time. Fix the amount of the contribution. Identify period for investment and specify date of the month. Open a checking account in lev or euro RBBG. You can always change their risk profile, to end the regular investment or download some / any accumulated investment 11

12 Disclaimer This newsletter is a promotional material. It contains the latest publicly available market information at the time of its issuance. The information used is taken from publicly available sources, no facts have been omitted or events that would change her saestvenost or would make it incorrect and misleading. The management company does not engage with the completeness and accuracy of the information. When calculating the coefficients using data from the financial statements of public companies. Investing in mutual funds involves certain risks. The value of shares and the income from them can go down. Profit is not guaranteed and investors may not recover the full amount of money. Investments in mutual funds are not guaranteed by a guarantee fund set up by the state or any other type of security, the investments of the fund are not guaranteed. The future performance of mutual funds are not necessarily related to the results of previous periods. The information presented is not a recommendation to invest in financial instruments, including shares of mutual funds organized and managed by Raiffeisen Asset Management Bulgaria and should not be construed as such. For investors it is advisable to get acquainted with the current prospectuses and rules of mutual funds before deciding to invest. The full prospectuses and additional information about mutual funds may be obtained at the offices of Raiffeisen Asset Management (Bulgaria) EAD and Raiffeisenbank (Bulgaria) EAD, as well as on the website of RAM Custodian Fund (main circuit) is Raiffeisen Bank International AG. The prospectus, annual and half-yearly financial statements, the prices for subscription and redemption, as well as additional information on the main circuit can be found free on the Internet in German at In case of international registrations from countries that are not German speaking, you can find this information in English Upon request, the investor is entitled to receive free, paper prospectus, annual and six-monthly report on the relevant chapters collective investment scheme. Contacts: Raiffeisen Asset Management (Bulgaria) EAD 55 Nikola Vaptzarov, EXPO 200, Phase II, Sofia info@ram.raiffeisen.bg Факс: web: Department Sales and Marketing : Tel: Department Portfolio Manager : Natalia Petrova Senior Portfolio manager Tel.: Natalia.PETROVA@ram.raiffeisen.bg Hristo Velikov Senior Portfolio manager Tel.: Hristo.VELIKOV@ram.raiffeisen.bg 12