In the conditions of instability at the market, the Russian managing companies are mainly concerned with their financial results rather than the level of information disclosure on their web sites. About this indicate the results of the fourth research the Interfax Center for Economic Analysis (Interfax-CEA) has done in May, 2008.

According to the research, the information disclosure average of Russia’s managing companies (MC) has almost remained at the level of November, 2007, having fallen within a statistical error. On the whole, the results of the last half-year can be named as stable, because there haven’t taken place neither major worsening, nor certain surge.

The situation with information disclosure on web sites about MC’s management and asset managers has improved, as more companies (as compared to the half-year ago) have started to provide their customers with the full information about strategies of investing mutual funds’ assets. Release of MC and mutual funds’ financial reporting (obligatory information for disclosure) on their web sites is still done improperly: disclosure of accounting reporting has worsened, but mutual funds’ reporting is released better.

MC’s index of information disclosure fell at statistical error level

The presented research, where the results of 2007 – 1Q 2008 have been analyzed, comprises 99 managing companies with the volume of mutual funds’ managed assets of no less than $1 million (by 2007-end). This research lists 6 companies more as compared to the previous analysis done in November, 2007.

The analyzed list filled such companies as Adekta MC, AssetFinanceManagement, Alliance Continental, Ratio Capital, B.I.N.Bank MC, Horizon MC, RIGroup, Baltinvest. Moreover, Nivelir MC has again joined the list, as it had been excluded from the previous research because of the low size of mutual funds’ assets at that moment. Nasledie venture (now Baltinvest MC), Holding Capital, CentreInvest Group were excluded form the research as well, as the size of mutual funds’ managed assets fell lower than RUR 24 million.

Within 1H, the index average of information disclosure has fallen by 1 point – from 79 to 78. In addition, the index average of obligatory information the disclosure of which is predetermined by the FFMS’s regulations (Federal Financial Markets Service), has fallen to 88 points (from 90), of optional information has upped to 67 (from 66). The new companies presented in the research have demonstrated rather unsatisfactory results – their average index equals 73 points.

The results of the last half-year (November, 2007 – April, 2008) can be named as relatively stable – only 28 MCs have worsened the level of information disclosure, and 27 companies have improved it. The level of more than a third of MCs presented in the research remained unchanged (less than 10% of MCs demonstrated their results’ stability as per the previous research).

Nevertheless, despite the fact that in between two researches all managing companies were mainly concerned with their financial situation rather than the level of information disclosure in the Internet, one should mark that a range of MCs considerably updated their web sites’ version. One should name such companies here as BCS MC (BrokerCreditService) and Ingosstrakh Investments.

Information disclosure about individuals continues to improve

Managing companies slowly continue to improve the level of information disclosure about their management and asset managers. And it is a quite positive factor indicating that managing companies still realize that a shareholder has a right to know who exactly manages his money and a company which he entrusted the savings.

So, 61 from 99 MCs post information about their management on web sites against 52 from 93. And 45 MCs release information about asset managers against the former 40. Solid Management MC, Maximum and Ingosstrakh Investments are the only companies that have seriously viewed the information disclosure about their management and asset managers.

Investment strategies are still a sealed data

The companies still slowly expose the information about strategies of mutual finds’ investing. About 80% of MCs still refuse to explain in details the strategies of investing on their web sites, and the majority of them present the limited information, for instance, about “blue chips” or bonds that are the basis for an investment portfolio of a mutual fund. Some MCs just ignore this issue and post on their web sites some pieces of mutual funds’ investment declaration.

However, there is a positive result: as of mid-May, 19 managing companies have exposed the investment strategy fully, and three companies more have been given in 0,5 points for exposing it more or less fully. In November, 2007 there were 14 analogical companies, and a year ago – 10. During the last half-year, Uralsib MC, AK Bars Capital MC and Agana MC in particular started exposing the information about the strategies of investing. Instead, PioGlobal Asset Management MC moved such data from its web site, and that immediately influenced on the company’s total point in the index.

The situation with finding out how the investment process is organized in the companies is even worse: how the overall process of investing is carried out from the level of a decision taking by an investment committee about investments in one or another asset to cooperation description of different MC’ divisions. Only 9 managing companies expose such data on their web sites (there was 7 in November). Within the last period, this list filled such companies as Uralsib and Raiffeisen Capital MC.

MСs do not prefer exposing their accounting reporting, but improve information disclosure on mutual funds

Disclosure of MCs’ obligatory financial reporting is carried out quite irregularly. So, the situation with MCs’ reporting (annual and quarterly accounting balance sheets, reporting on revenues and losses, as well as an annual audit report) has somewhat worsened: as per the November research results, the average point of this category has been 4,2 out of a possible 5, and now it has fallen to 4,0.

68 MCs present their quarterly accounting reporting on their web sites (69% from the total amount), while in November, 2007 the figure has attained 78% from the total amount. 88 companies from 99 expose their annual financial reporting (in November – 82 from 93). In its turn, the situation with the disclosure of the obligatory mutual funds’ reporting improved: if the half-year ago 82% of MCs presented their data about mutual funds’ activity on web sites, now their amount grew to 88%.

Nevertheless, availability/unavailability of the obligatory exposed documents and accounting balance sheets can inevitably influence on a MC place in the final table of information disclosure.

Changes in the group of leaders

PioGlobal Asset Management MC that regained its leading position in the previous research, did not keep it now and gave a place to the new winner. In particular, the company did not post on its web site any data about its earnings for 2007, moreover, the description of the managed mutual funds’ investment strategy just disappeared. In terms of this data, the company lost 8 points, and took a lower position.

Uralsib MC became the obvious leader of the current research with 100 points, as within the whole period when the research of information disclosure was done, the company was in Top 10, and now it reached the front positions. Lately, the company published the necessary information on its web site to get the winning 100 points: the strategies of mutual funds’ investing were fully exposed, the information about the company’s management and asset managers was presented, as well as the whole investment process was described in details.

Three companies more – Alliance ROSNO Assets Management, Otkritie, Aton Management – with 98 points each have shared the 2^nd place. Alliance ROSNO, Aton Management and KIT Fortis Investments are the current leaders that have kept their places from the former Top 5.

Leaders of information disclosure index

In its turn, the minimum point the companies receive for information disclosure has remained the same – 48 points, and it is still belongs to Eltra Invest MC. Investment Capital MC and Bizon Plus MC were in the former Top 5 of the companies with the lowest level of information disclosure, and they enter the current Top 5 along with the leader.

Managing companies with the lowest index of information disclosure

Uralsib MC is the leader having added 6 points. However, Promsvyaz MC is also among the leaders by the index growth of information disclosure, as it has been given 25 points due to the exposure of the necessary financial reporting, including the accounting one, as well as the investment strategy the company has released on its web site. Other leaders of the index growth have improved their results due to the obligatory exposed reporting and balance sheets the companies have started to post on their web sites.

And vice versa – when a company ignores the requirements of the legislation on disclosure of a MC’s financial reporting and mutual funds, it can result in points losing in the index. All leaders of the index drop of the information disclosure have lost their points because they did not release their reporting by the term set by the requirements of the legislation.

Leaders of index growth of information disclosure

Leaders of index drop of information disclosure

Russian managing companies’ indices of information disclosure

The data of the Interfax Center for Economic Analysis