Structured Funds New Investment Offering in Turkey
The Capital Markets Board (CMB) of Turkey has approved the launch of the first capital-protected mutual funds in Turkey following several months of close collaboration between Fortis Investments Turkey (Fortis Portföy) and the local regulators. This resulted in significant changes in Turkish mutual fund legislation. Fortis Portföy, with the support of Fortis Investments, has been in dialogue with local regulators to develop a level playing field in Turkey for capital-protected mutual funds for several months. The company says that this type of fund should appeal to Turkish investors for reasons such as a lack of diversification opportunities, falling interest rates, high equity market volatility and their somewhat risk-averse nature. To date, local investors have been limited to traditional asset classes (money market, fixed income, equities). Fortis Portföy will launch two structured funds with maturities of six months and two years through Fortis Bank on 21 November. The funds are denominated in New Turkish lira (TRY) and offer 100% capital protection. At maturity, investors participate in the performance of the DJ Eurostoxx 50 Index (an index of 50 European blue-chip stocks from EMU countries). Fortis Portföy plans further regular launches of funds with different maturities and pay-off schemes in the near future.