Correct forecasts for 2004, foreseeing higher profitability of equities than debt instruments, and also an active approach from fund managers, have brought very good results for Polish equity, balanced and secure life funds, offered by Commercial Union Poland Life Insurance Company within the framework of individual and group unit-linked policies.
Correct forecasts for 2004, foreseeing higher profitability of equities than debt instruments, and also an active approach from fund managers, have brought very good results for Polish equity, balanced and secure life funds, offered by Commercial Union Poland Life Insurance Company within the framework of individual and group unit-linked policies.
In line with the expectations of managers from CU Investment Management, last year was a very good one for investment in equities quoted on the Warsaw Stock Exchange. The main WIG market index gained nearly 28 percent over the period.
The main motors for the rise in Polish equity prices were the acceleration in economic growth in Poland and the associated improvement in financial results of quoted companies. A significant part was also played by a fall in investment risk and rising interest in Polish assets on the part of foreign investors following our country’s accession to the European Union on 1 May 2004.
"While working out an investment strategy at the beginning of 2004, we assumed that we would get better returns from equities than from bonds and other debt instruments. Our investment portfolios were shaped on the base of this assumption," said Marek Przybylski, general manager of CU Investment Management.
"Thanks to this strategy, and to the active approach taken by fund managers, CU Life funds have once more achieved very good, even spectacular, rates of return. One only has to recall the almost 36% return produced by the Dynamic Fund in 2004 and the almost 160% result for the last three years, and to compare these with the corresponding changes in the WIG index: nearly 28% in 2004 and a little over 90% for the last three years," added Mr Przybylski.
The other Polish funds have also achieved very good results, both last year and over longer periods. Rates of return to a large extent depended on the proportion of equities in the investment portfolios, although secure funds have also achieved profits that are significantly ahead of competitive forms of investment.
CU fund managers are looking with some optimism at the year that has just begun.
"We need to bear in mind, though, that the relative attractiveness of equities relative to debt instruments after two boom years is clearly now lower. Consequently, the key to success this year will be the selection of companies for investment portfolios from both the primary and the secondary market. A pretty active changes in allocation between equities and debt instruments will also play an important part," emphasised Mr Przybylski.
Rates of return of CU Life funds as at the end of 2004 [in percent]
| Fund | 1 year | 3 years | 5 years |
| Guaranteed | 4.92 | 23.24 | 55.48 |
| Stable Growth | 8.79 | 33.14 | 74.34 |
| Balanced | 17.38 | 60.03 | 86.81 |
| International | 1.77 | 20.21 | 0.58 |
| CU Growth Fund | 30.74 | 100.35 | 72.52 |
| Dynamic | 35.94 | 157.36 | 151.52 |
| WIG | 27.94 | 91.32 | 47.29 |
| Inflation | 43.5 | 6.9 | 21.2 |
A specialised company, Commercial Union Investment Management (Poland), manages the assets of the CU Life funds. It has licensees from the Polish Securities and Exchange Commission to manage securities portfolios and for investment consultancy. It is the second largest asset management company in Poland by funds under management which amounted to 9.5 billion Polish zloties (£ 1.7 billion) at the end of 2004.
For further information please contact:
Grażyna Goslings, Corporate Communications Director, CU Poland Group, tel. + 48 22 557 40 93, e-mail: bohdan_bialorucki@cu.com.pl. Additional information on Commercial Union Poland Group can be found at http://www.cu.com.pl