During the first year of unit trust sales, Commercial Union Unit Trusts Company acquired client assets of 180m zlotys (£30m).
During the first year of unit trust sales, Commercial Union Unit Trusts Company acquired client assets of 180m zlotys (Ł30m). Following a change in its charter on 1 April 2003, the CU Stable Growth fund is being offered to all clients. CU Unit Trusts Company management believes that the times of high returns from bond unit trusts are over. This is why the CU Stable Growth fund should provide an attractive offer for clients seeking higher profits and, at the same time, value secure investments.
On the eve of Poland's entry into the European Union, we are observing the start of a process of changing investment trends. A clear sign of this is a reduction in the numbers of clients who keep their savings in bank deposit accounts and an increase in those who seek active, modern forms of investment, such as unit trusts and long-term unit-linked life insurance products.
"This tendency intensifies as Poland goes through its first market economic cycle following World War II, ending in the present dramatic drop in inflation and interest rates. We expect that both inflation and interest rates will remain low during the next few years and this means very low returns from bank deposits. Both the long-term unit-linked life insurance products and medium and short-term unit trusts investments often chosen by clients, offer a chance of achieving significantly higher profits than from traditional bank deposits," said Jaroslaw Myjak, chief executive, Commercial Union Poland group.
CU is the only unit trusts company on the Polish market that distributes unit trusts almost exclusively through insurance agents. "At the present time, over two thousand specially trained CU agents have qualified to sell unit trusts. This is how we are managing to take greater advantage of the potential of our distribution network, insuring that the clients have access to CU Group's complete offer," added Mr Myjak.
During the first year of operations, all CU unit trusts achieved very high rates of return, significantly higher than average results of the peer group unit trusts. During this period, convergence of interest rates in Poland with the levels of those in the euro zone countries resulted in very high rates of return for CU Bonds fund. "The very good results obtained by funds investing in equities, ie Polish Equities fund and Stable Growth fund, as a result of efficacious selection of equities to the investment portfolio," said Marek Przybylski, general manager, CU Unit Trusts Company and CU Investment Management.
Rates of return of CU unit trusts for the period 6.05.2002 to 6.05.2003
| Fund | 12–month rate of return [percent] | Fund group | Number of funds in group | Average rate of return in group [percent] |
| CU Deposit Plus | 8.87 | money market | 16 | 7.94 |
| CU Bonds | 17.66 | debt securities | 17 | 13.68 |
| CU Stable Growth | 22.68 | stable growth | 11 | 9.32 |
| CU Polish Equities | 28.94 | equity | 19 | -2.52 |
Following a change to its articles on 1 April, 2003, the CU Stable Growth fund, originally intended for institutions setting up employee pension programmes, is being offered to all clients. Clients using the CU Individual Investment Programme (the CU unit trusts systematic savings programme) may invest in CU Stable Growth fund by selecting the “CU 10” strategy. This is one of the stable growth group funds, adjusted for long-term investment with the aim of accumulating capital, eg for additional retirement protection. An investment period of at least three years is recommended. At least 50% of this fund's assets are debt securities, but Polish equities may only make up as much as 40% of the assets.
"The changes to the articles of the CU Stable Growth fund are part of our strategy to expand the offer of unit trusts which give the clients the chance to achieve higher profits than they could from the money and bond market funds. In a low interest rate situation, money and bond market funds will yield relatively lower returns, but still higher ones than those from classic bank deposits. This is why, this year we are including low risk mixed funds in the offer that give the clients an opportunity of investing in equities and debt securities," said Mr Przybylski. CU Stable Growth fund invests in Polish assets only. CU Unit Trusts Company plans to include a similar fund investing in the euro zone and denominated in euro in the offer in the fourth quarter of 2003.
"In the near future we will provide our clients with access to new interesting financial tools that should increasingly become available in Poland, such as corporate debt securities and mortgages. Due to the expected rise in interest among Polish clients in investments in European and world markets, we will be including in our offer unit trusts managed by our parent company, the Aviva group," added Mr Przybylski.
The "Spring is your best chance" CU Stable Growth fund promotion will last from 2 April to 30 June, 2003. It also includes clients who have chosen the “CU 10” strategy within the CU Individual Investment Programme. Clients who make a single payment of at least 3,000 zlotys (Ł476) into the CU Stable Growth fund during this period and who fill out their competition coupon correctly will receive a company "spring” mug.
This April, the CU Individual Investment Programme received the European Medal –a distinction awarded by the Business Centre Club, Poland’s top business association, and the European Integration Committee, a Polish government department, for goods and services meeting the obligatory standards in European Union countries. The CU Individual Investment Programme is an innovative offer for unit trusts clients and the basis of the CU Unit Trusts Company offer. The CU IIP enables the client to make rational decisions that take account of his aim and investment strategy and his penchant for taking risks by choosing one of ten investment strategies.
Assets of CU unit trusts are managed by Commercial Union Investment Management (Poland), a specialist company, licensed by Poland’s Securities and Exchange Commission to manage securities portfolios and investment advisory. As at the end of March 2003, CU IM managed total assets worth over 6.8bn zlotys (over Ł1bn), making it the second largest asset management entity in Poland.
For further information please contact: Grazyna Goslings, Corporate Communications Director of the CU Poland Group, tel: +48 22 557 40 93, fax: + 48 22 557 40 26, e-mail: bohdan_bialorucki@cu.com.pl. Additional information about the Commercial Union Poland group can also be found on the web page http://www.cu.com.pl