Croatian Mutual Fund Asset Structure – September 2020

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

Since asset managers play a significant role in the Croatian capital market, it is particularly interesting to see how they have been affected by the ongoing Covid-19 situation.

As visible from the graph below, NAV of all funds has witnessed a steady increase for each consecutive month since April, and as of end September stood at HRK 17.269bn (+2.4% MoM or HRK 403.4m). This still represents a decrease of 23.5% YTD (or HRK 5.8bn).

As a reminder, in March, UCITS funds observed a sharp decrease in their NAV of 32.2% or HRK 7.42bn. We note that most of the mentioned decrease could be attributed to the withdrawals from the funds, while a smaller portion reflects the change in value of assets in which the funds invest in. 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.

The biggest decrease of a YTD basis was observed in bond holdings, which decreased by 28% or HRK 4.4bn. Meanwhile shares observed a decrease of 11% or HRK 204.2m.

On a MoM basis, Bonds observed the highest increase of HRK 165.93m or 1.5%. Despite the negative sentiment observed on the global equity markets, equity holdings increased by 3.1% or HRK 46.9m. We note that 93% of that increase came from foreign equity holdings.

Asset Structure of UCITS funds (September 2020)

Looking at the asset composition of Croatian UCITS funds, it seems that asset managers have not significantly changed 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 September 2020 bonds take up for 62.1% of the total assets. Such a decrease could mainly be attributed to the above-mentioned withdrawals from funds which (predominantly) invest in the mentioned asset class. Of the aforementioned bond holdings, domestic government bonds account for 42.3% of the total assets under management (or HRK 7.555bn) which is the single largest item of UCITS funds.

Shares have observed a gradual increase in total assets since February, and currently account for 8.9% of the total assets (or HRK 1.581bn). Note that domestic shares account for 28.5% (or HRK 450m) of the total equity held by Croatian UCITS funds. Domestic equity holdings are down by 24.9% YTD, representing a decrease of HRK 149m.

Total Assets of All Croatian UCITS Funds (2015 – September 2020) (HRK bn)