Microcredits are corporate bonds

with a high payback ratio

 

Martin, you are our most experienced fund manager in the SRI team of Erste Asset Management, and you

have been in charge of the ERSTE RESPONSIBLE MICROFINANCE fund ever since it was launched. What does

microfinance mean?*

 

Microfinance comprises the idea of granting financial services to people who usually do not have access to bank

services. As a result, microfinance is prevalent mostly in emerging and developing countries. But microfinance

also includes other financial services such as savings products, insurance, payment services, and technical support.

 

What exactly does the ERSTE RESPONSIBLE MICROFINANCE investment fund do?

 

Our fund is an actively managed umbrella fund that invests in different microfinance funds, in bonds issued by

microfinance companies, and – up to ten percent – in microfinance companies. Given that we invest a maximum

of 3% in any individual microfinance institution, we have achieved a broad degree of diversification. Besides,

we focus on a broad range of themes and regions.

 

Who is granted a microcredit?

 

Microcredit debtors are often start-up entrepreneurs who have no access to financial services, no collateral,

and whose liability is often bundled with that of other debtors. Technically speaking, microcredits are corporate

bonds with a very high payback ratio.

 

What is usually financed by micro-loans?

 

Typical examples of the financing micro-loans provide are the procurement of cattle or seeds in agriculture,

the setting-up of a market stall, or the purchase of a sewing machine for a tailor’s shop. Very often the money

is also used to establish a small grocery or a tourism-related service.

 

ERSTE RESPONSIBLE MICROFINANCE received the “Österreichischer Dachfonds Award”, the Austrian Umbrella

Fund Award in 2013.

 

Yes, our fund came out on top in the category “Hedge fund conservative, 3Y performance”. In addition,

ERSTE RESPONSIBLE MICROFINANCE, just like all our sustainable funds, carries the European Transparency

Logo, which is awarded for transparent investment principles. Such awards definitely help to increase interest

for this investment category.

 

Why has this investment class been a niche market in spite of its stable yield?

 

The Austrian legislator as well as its Financial Markets Authority define microfinance investments as so-called

“alternative investment strategies”.** This means they are lumped together with hedge funds and similarly risky

strategies and thus are unfortunately out of the question for some institutional investors.

 

This means the risk classification is too high?

 

This fund comes with a NAV, established on a monthly basis. This means that investors can buy and sell their

investments every month. Our website provides them with continuously updated information about the fund

as well as all relevant documents. It is our goal to constantly foster the interest in and transparency of this

investment category.

 

* The fund was launched on 4 January 2010

** See the Austrian Alternative Investment Fund Management Act (Alternative Investmentfonds Manager-Gesetz – AIFMG)

 

This document is an advertisement. All data is sourced from ERSTE-SPARINVEST Kapitalanlagegesellschaft m.b.H., Erste Asset Management GmbH,

and RINGTURM Kapitalanlagegesellschaft m.b.H. unless indicated otherwise. Our languages of communication are German and English.

 

The prospectus for UCITS (including any amendments) is published in Amtsblatt zur Wiener Zeitung in accordance with the provisions of the InvFG

2011 in the currently amended version. Information for Investors pursuant to § 21 AIFMG is prepared for the alternative investment funds (AIF)

administered by ERSTE-SPARINVEST Kapitalanlagegesellschaft m.b.H., Erste Asset Management GmbH, and RINGTURM Kapitalanlagegesellschaft

m.b.H. pursuant to the provisions of the AIFMG in connection with the InvFG 2011.

 

The fund prospectus, Information for Investors pursuant to § 21 AIFMG, and the key investor document/KID can be viewed in their latest versions

at the  web site www.erste-am.com or obtained in their latest versions free of charge from the domicile of the management company and the

domicile of the custodian bank. The exact date of the most recent publication of the fund prospectus, the languages in which the key investor

document is available, and any additional locations where the documents can be obtained can be viewed on the web site www.erste-am.com.

 

This document serves as additional information for our investors and is based on the knowledge of the staff responsible for preparing it at

the time of preparation. Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors

in terms of earnings, taxation, and risk appetite. Past performance is not a reliable indicator of the future performance of a fund.

Fund facts

ERSTE RESPONSIBLE MICROFINANCE is mainly geared to investors who act sustainably and want to provide

their capital for the long term. It is not a donation, but promotes entrepreneurship and yields an adequate return.