SIS FUNDS (EQUITY)

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The EBRD will invest CZK 186 million and CZK 159 million in Sporobond and Sporotrend respectively, two mutual funds which SIS will launch by the end of 1998. The two funds will target domestic retail and corporate investors interested in diversifying their savings and cash management. The new funds will belong to a new family of mutual fund products launched by SIS with low overall fees and which allow easy switching between the funds. The project will support the introduction of new mutual funds products in the Czech market with completely unique characteristics compared with other mutual funds now available. The idea of different mutual funds, with high liquidity features, linked to Giro accounts and offered in competition to deposits will stimulate competition within the banking sector and offer new alternatives to retail and corporate customers. By participating in the launch of two new mutual funds, the Bank's investment will help to: SIS will be the investment manager for the two funds. SIS is one of the largest Czech investment managers, with about 19 per cent of the market share in terms of assets managed. Sporobond is a fund which will mainly invest in local government and corporate bonds. Sporotrend will be investing primarily in Czech listed stock and equity-related instruments. CZK 186 million (ECU 5.3 million) in Sporobond and CZK 159 million (ECU 4.5 million) in Sporotrend. The funds will be open ended so the final size of the project is not known. This financial intermediary project will have no direct impact on the environment. SIS has agreed to carry out its operations in accordance with the EBRD's "Environmental Procedures for Listed Securities" and will submit an annual environmental report to the Bank. None