InterCapital Asset Management to list ICBET and ICASH on the Ljubljana Stock Exchange, trading to start on 23 January 2024.
Ljubljana Stock Exchange has announced the listing of two new open-end funds on its website, the ICBET (BET ETF) and ICASH (Money market ETF), by InterCapital Asset Management. Both ETFs will start trading on 23 January 2024.
But before we get into the specific ETFs, we will emphasize the key benefits of owning an ETF:
- Diversification – the single biggest advantage of owning an ETF is the instant diversification you get just by owning “one” product, at the cost of only that specific single product
- Liquidity – ETF trades on the stock exchange and can be bought/sold throughout the trading day at market prices
- Transparency – Provide transparency into the assets they hold. You can usually see what’s in the ETF on a regular basis.
- Low cost – Typically have lower expense ratios compared to mutual funds.
- Tax benefits – Dividends that the ETFs receive are usually not taxed (or at taxed at lower rates).
ICBET
The Romanian economy has been on a slow and steady growth trajectory since its entrance into the European Union in 2007. Supported by the ever-increasing amount of EU funds and a goal of convergence with the rest of the EU. Through this, the Romanian economy has many opportunities for continued growth. In this environment, the Romanian stock market also expanded, attracting more and more investors, both institutional but also retail.
As a reminder, InterCapital’s ETF that is tracking BET (Romanian index) and Money market ETF have already been trading on the Zagreb Stock Exchange (ZSE) for a part of the previous year. Since the listing (during June 2023!), 7 BET reported a strong double-digit return of 27.8% for each investor that chose to expose its portfolio to the Romanian stock market. And only to remind you, all by owning “just” one, already diversified, security in your portfolio. Romanian stock markets is particularly interesting, even after the aforementioned returns, as Romania might soon become a so-called “Emerging market” (from the current status of “Frontier”) on the back of Hidrielectrica’s listing. Further, around 50% of BET’s weight currently comes from the Energy sector. However, even with Energy making the majority of its weight, we should not forget the Romanian banking sector as a heavyweight.
ICASH
Money market ETFs became very popular in the last three years due to their liquidity advantage. Those kinds of ETFs have lower management costs compared to other classic funds, they are very liquid and transparent. Finally, in the environment of higher interest rates (both from Fed & ECB) they offer attractive yields.
InterCapital’s ETF, 1st money market of its kind in the region, invests in short-term securities of the highest quality issuers from the eurozone. The ones that enjoy a high credit rating. ICASH offers a solid opportunity for an investor wanting short-term securities in their portfolio, especially during the current times of high-interest rates – making him more appealing than usual. Currently app. 72% is invested in Treasuries issued by France, Belgium, Germany and the Netherlands, while the rest is invested in money market instruments or reverse repurchase agreements of bonds. Finally, as with every ETF so far (IC CRO, IC SLO & now IC BET), if an investor is invested in a fund for more than two years, he is exempt from taxation.
Overall, an investor on the Ljubljana Stock Exchange will gain an opportunity to expose its portfolio to both the Romanian stock market & Money market on a cost & tax-efficient basis.
7BET performance on ZSE [since listing]
Source: Bloomberg, InterCapital Research
