index funds available for romanian citizens?

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Topic Author
SefuLaBani
Posts: 7
Joined: Mon Nov 24, 2014 8:25 am

index funds available for romanian citizens?

Post by SefuLaBani » Mon Nov 24, 2014 9:10 am

Hello. I got a big problem. I am from Romania and I don't seem to have much choices about index funds.
At the moment, our mass population seem to orient themselves for mutual bond funds(and that is an eye opener which only happened in the last 2-3 years. My country is a post-communist one, where stock markets were banned by the goverment. That mentality is still present today because parents with communist mentality still have decisive influence on formation and decision-making of pupils).
So basically if I would go to a bank and ask for something different than a basic bank savings account, the clerk at the bank will look at me very weird.
Needless to say, we have only one index(read non etf) fund which tracks the BET index(Bucharest exchange) which has decent return but has limited credibility with only 70 investors(Certinvest Bet Index). Also, in their papers, they only show the subscription and withdrawal fee and I can't find the administration fee nowhere(which further decrease their credibility, apart from the fact that they are not an actual banking institution and they seem not to be listed by Bloomberg).
We also have an ETF with 0.25% administration fee - ETF BET Tradeville (TVBETETF - type ETF), which seems to be a division of Vanguard in Romania but I don't know for sure. I wanted a simple index with 0.15% fee such as BT Index Romania ROTX (which is offered by a trusted bank) but I wanted the BET index instead or more extensive options(S&P500 type index I can only dream in this God forsaken country).

The reason for my suspicion is the limited number of investors(less than 200 for the "Vanguard.ro ETF BET Tradeville" and less than 70 for the Certinvest BET Index. The BT Index Romania ROTX is more trustful, but ROTX is not a well-known index at all.

Could you recommend some European index funds with access to S%P type index funds that accept Romanians? I feel at this point that romanians have no interest in their future.

birdec
Posts: 43
Joined: Fri Jul 11, 2014 10:44 am

Re: index funds available for romanian citizens?

Post by birdec » Mon Nov 24, 2014 2:48 pm

Am bani de dat - am datorii la stat! Postul tau mi-amintesc de cantecul asta. Salut din America! Am stat doi ani in Romania dar am pierdut limba ca n-am cu cine sa vorbesc. Oricum...

Tradeville might be your best bet. Expense ratios seem hard to come by from what I've looked at. Also, I'm not sure an index fund tracking the BET is your best option since there are only 10 companies in BET. Here are some things I found that you might want to research further: http://www.fondulproprietatea.ro/sites/ ... r_2014.pdf and http://www.bvb.ro/info/indices/2014/201 ... tsheet.pdf

You also might want to look into investing in European emerging/frontier market ETFs or mutual funds (although that's probably not exactly what you're looking for).

It might be easier if you tell us which brokerages are available to you.

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dratkinson
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Location: Centennial CO

Re: index funds available for romanian citizens?

Post by dratkinson » Mon Nov 24, 2014 5:51 pm

For some ideas, you might read this: http://www.bogleheads.org/wiki/EU_investing .

And the link to this: http://www.bogleheads.org/wiki/UK_Investing .
d.r.a, not dr.a. | I'm a novice investor, you are forewarned.

Topic Author
SefuLaBani
Posts: 7
Joined: Mon Nov 24, 2014 8:25 am

Re: index funds available for romanian citizens?

Post by SefuLaBani » Mon Nov 24, 2014 7:08 pm

It's a pleasure hearing from you, birdec. I wasn't hoping for many co-nationals.
Thank you very much for input. I was thinking about the Tradeville ETF to be my best option.
I think I will directly purchase it from their site, as long as the brokerage goes. This is an abstract concept for me. I avoided actual brokerages until now because I only purchased 2 mutual bond funds (ERSTE Bond Flexible RON and ING International Romanian Bond, which I purchased from BCR and ING, respectively). But those were banking institutions. As long as I opt in for the Tradeville one, I will get in touch in them for the purchase procedure.
My investor profile is more on low tax index funds, so that is why I don't like Fondul Proprietatea. Also, Fondul Proprietatea is the subject of an ongoing corruption scandal in Romania after the arrest of DIICOT's(Romania's Antiterrorist Organisation) chief Alina Bica.
I would be very interested in BET-TR and that type of indexes but I can't find an index fund that will take care of that for me(I am not stock market - operations savvy, so that is why I opt for the index funds). We have 1 BET index available, 1 BET ETF(Tradeville), 1 index ROTX(BT), BT index Austria, and the Certinvest ones, which seem shady. BET-TR seems very attractive by itself, but if I don't have an index for him, i can't purchase it.

also, @dratkingson, very useful information, I read them both and the links. I sent an email to vanguard.uk for clarifications.

AlexS
Posts: 1
Joined: Fri Mar 06, 2015 2:29 pm

Re: index funds available for romanian citizens?

Post by AlexS » Fri Mar 06, 2015 2:35 pm

Hi, SefuLaBani,

I'm also looking to invest in index funds and have the same questions, also being a Romanian resident. I was wondering how your search went and whether Vanguard UK offered any positive answer. Any findings on a broker taking Romanian clients?

Any answer is much appreciated.

Thanks,
Alex

NickRoss
Posts: 1
Joined: Thu Jun 16, 2016 5:27 pm

Re: index funds available for romanian citizens?

Post by NickRoss » Thu Jun 16, 2016 5:35 pm

Hi guys!

I know it's been a while since this question was asked, but I find myself in the exact same situation and was wondering what you eventually did. So, if SafulLaBani, AlexS, or anyone else has any suggestions or experiences regarding this topic that they would like to share, it would be greatly appreciated.

Thanks.

mihaicl1981
Posts: 1
Joined: Sun Oct 09, 2016 11:17 am

Re: index funds available for romanian citizens?

Post by mihaicl1981 » Sun Oct 09, 2016 11:32 am

Hello dude.
As a Romanian citizen and investor your best bet is TVBETETF.
http://www.bloomberg.com/quote/TVBETETF:RO
It follows the BET10 index and reinvests dividends.
That is if you want to invest in RON.
The return is pretty good ~ 12%/year even including their fees (1.2%/year).
The only downside (besides the fees) is the lack of diversification. If TLV (Banca Transilvania) goes bankrupt you lost 20%. Not cool.

However I can invest directly in US.VTI using my broker (Tradeville). They also offer US.VOO (S&P 500 index).
I am honestly still trying to figure out a bond fund to invest in (in RON's).
To be perfectly honest TVBETETF has been good enough overall but long term I am betting on Vanguard Total Stock Market index.
As the index rules are changing to include more companies the diversification factor is improving .. slowly.
What really sucks if you are in Romania is that the dividend tax is 30% for VTI (TVBETETF does not pay any dividends).

Good luck with investing.

Full disclosure :I have been investing with Tradeville since 2012 .. overall ~ been lucky so far and only recently started contemplating bonds.

barenziah
Posts: 1
Joined: Sat Feb 25, 2017 11:35 am

Re: index funds available for romanian citizens?

Post by barenziah » Sat Feb 25, 2017 11:37 am

What about http://www.alphabank.ro/products/fondur ... 0Funds.pdf ? Benchmark S&P 500
I'm from Romania, but new to investing. Someone recommended that to me, said it's by far the highest 5yr-return% of what's currently available here. www.bloomberg.com/quote/ACOSUEQ:GA

alinm
Posts: 4
Joined: Wed Apr 13, 2016 10:05 am

Re: index funds available for romanian citizens?

Post by alinm » Wed Mar 22, 2017 9:08 am

So cool this thread is still alive

@barenziah, this Alpha Bank fund is actively managed, so a totally different beast.
I think they should put TotalExpenseRatio in the prospect, maybe they do somewhere else or I guess it can be computed from their management and subscription fees (too beginner here to fully grasp how you'd do that).

A question for @mihaicl1981,
Tradeville comms are high, a good 65bps
Do you get commission free trades in their own ETF - TVBETETF?
Also, do they have an inactivity fee, if you just buy that ETF, and nothing else, do they still charge you?
I played with their demo account last year but it's years (decades?) behind market standard (e.g. IB)

MariusL
Posts: 3
Joined: Fri Sep 29, 2017 4:39 pm

Re: index funds available for romanian citizens?

Post by MariusL » Fri Sep 29, 2017 4:50 pm

good thing I found this, as I had the same questions :)

I'm now using T*ville for buying ETFS - paying 25eur / 0.5% for each transaction is one issue
buut..
the ETFS I bought (VOO, VTI) are distributing dividends... and the broker doesnt have an option to auto reinvest the dividends ( also called DRIP plan - A dividend reinvestment plan) so I'll have to submit the tax forms every year, which I really dislike

Are you guys using other online brokers to handle ETF transactions? cheaper and with DRIP plans ?:)
I tried opening at several US based brokers but they dont accept romanians - maybe some european brokers?

imperia
Posts: 155
Joined: Tue Feb 21, 2017 6:31 am

Re: index funds available for romanian citizens?

Post by imperia » Sat Sep 30, 2017 6:26 am

Does Romania has tax treaty with USA?

If not why you do not use Irish domicile ETF.
Ireland domicile ETF pay just 15% dividend tax for holding USA stocks.
You can chose accumulatian ETF(reinvest dividend) so you do not pay dividend tax in your country.

For broker i sugest Interactive Broker it is open for non US costumers.

TedSwippet
Posts: 2257
Joined: Mon Jun 04, 2007 4:19 pm

Re: index funds available for romanian citizens?

Post by TedSwippet » Sat Sep 30, 2017 8:01 am

imperia wrote:
Sat Sep 30, 2017 6:26 am
Does Romania has tax treaty with USA?
Romania has a US income tax treaty, with a 10% rate for US source dividends.

It does not have a US estate tax treaty, meaning that 'US situs' assets above $60k are 'in scope' for US estate tax at up to 40%. VOO and VTI are both US domiciled ETFs, and so are considered to be 'US situs' assets.

stephenthegreat
Posts: 1
Joined: Wed Jul 10, 2019 9:20 am

Re: index funds available for romanian citizens?

Post by stephenthegreat » Wed Jul 10, 2019 10:35 am

Hi all,

I would highly appreciate members guidance, if somebody can advise further (as of now) on the same topic. That is, if Romanians can have access to invest in any ETFs at reasonable costs, comparable to the ones from the West/US and what are the best ETFs covering US/World equity in terms of fund domicile and currency (USD or EURO) to invest in for Romanians. I see for example BT has some Austrian index but the cost is 0.15%/MONTH!, that is 1.8%/year and eats most of the gains.

Also, is there any other broker other than Tradeville?
Many thanks in advance for any tips.

QuantOfAsia
Posts: 34
Joined: Sun Apr 14, 2019 7:57 pm
Location: Hong Kong

Re: index funds available for romanian citizens?

Post by QuantOfAsia » Wed Jul 10, 2019 7:23 pm

I thought Romanians could easily enough access UCITS ETFs listed in London or Frankfurt, where iShares, Vanguard, State Street, DWS, and Lyxor all have good, low cost, and world class ones. Can you open an interactive brokers account and fund it in a currency like EUR or USD? I don't know about restrictions/costs of converting / transferring RON into foreign currencies.

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