Croatian Mandatory Pension Funds Asset Structure – September 2020

For today, we decided to present you with an updated asset structure analysis of Croatian Mandatory Pension funds.

Pension funds could be seen as the key player on the Croatian capital market, as their current domestic equity holdings account for more than 40% of the free float market cap of ZSE. Therefore, it is particularly interesting to see how they have been affected by the ongoing Covid-19 situation. As the global financial markets, as well as the Croatian capital market, observed a partial rebound in April and the following months, it is worth seeing how Croatian mandatory pension funds performed during that period.

NAV of pension funds has witnessed a steady increase for each consecutive month since April, and as of end September stood at HRK 115.76bn (+0.8% MoM or HRK 925.3m). This also represents an increase of 2.8% YTD.  As a reminder, in March (the worst performing month for almost all asset classes) the pension funds recorded a decrease of 3.3% MoM or HRK 3.76bn.

It is also worth adding that in September net contribution payments amounted to HRK 641.54m, which is by HRK 32.24m higher compared to the previous month.

Asset Structure of Croatian Mandatory Pension Funds (September 2020)

Source: Croatian Financial Services Supervisory Agency, InterCapital Research

Looking at the asset composition of pension funds, it seems that asset managers have not changed significantly their composition, which can be seen in the graph above. Bonds account for the vast majority of total assets (70.1%) which as of September amounted to HRK 81.545bn (increase of HRK 693m MoM or 0.9%). Shares come next, with 17.2% or HRK 20.06bn. Unlike Croatian UCITS funds whose majority of equity holdings are foreign, mandatory pension funds have 58% (or HRK 11.70bn) of their equity holdings allocated in domestic shares. Note that since the beginning of the pandemic, August represents the first-time that the shares are up on a YTD basis (+1%). Meanwhile, domestic equity holdings are still down by -5.3%.

Total Assets of Croatian Mandatory Pension Funds (2018 – September 2020) (HRK bn)

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