Croatian Mutual Fund Asset Structure – May 2020

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

Since the asset managers play a very significant role in the Croatian capital market, it is particularly interesting to see how they have been affected by the ongoing Covid-19 situation. Given that the global financial markets observed a partial recovery in April as well as May, it is worth seeing how Croatian UCITS funds performed during that period.

According to the report, NAV of all funds in May 2020 experienced a slight increase of 1.3% MoM (or HRK 205m), amounting to HRK 16.08bn. This also represents a decrease of 16.7% YoY and a decrease of 28.8% YTD. As a reminder, in late February until late March UCITS funds recorded the majority of the yearly decrease in their NAV. HANFA noted earlier this year that since 21 February until 24 March, 86.1% of the decrease could be attributed to withdrawals from the funds, while the rest 13.9% can be attributed to a change in value of assets in which the funds invest. As turmoil on financial market subsided withdrawals from funds were halted, but the value of most financial instruments has not yet returned to pre-crisis levels.

Asset Structure of UCITS funds (May 2020)

Looking at the asset composition of Croatian UCITS funds, it seems that asset managers have not changed significantly their composition, which can be seen in the graph above. Since the beginning of 2020, we witnessed a considerable decrease of bonds in the assets structure which went from 65% in January 2020 to as low as 59% (April), while as of May 2020 bonds take up for 61.3% of the total assets. Such a decrease could mainly be attributed to withdrawals from funds which (predominantly) invest in the mentioned asset class, but also partially due to the decrease in value of bonds compared to the end of 2019.

Shares have observed a gradual increase in total assets since February, and currently account for 8.5% of the total assets. Note that domestic shares account for roughly a third of the total equity held by Croatian UCITS funds.

Total Assets of All Croatian UCITS Funds (2018 – May 2020) (HRK bn)