By the end of October 2023, the Croatian mutual funds’ total NAV amounted to EUR 2.1bn, increasing by 1.9% MoM, but decreasing by 3% YTD, and 4.1% YoY. Furthermore, compared to its pre-COVID-19 maximum, the current level is 32.2% lower.

According to the latest release by the Croatian Financial Services Supervisory Agency, HANFA, the Croatian mutual funds recorded an improvement on a MoM basis, but are still below the level they were at the beginning of the year, or in the same period last year. As such, the NAV of the Croatian mutual funds amounted to EUR 2.1bn, increasing by 1.9% MoM, but decreasing by 3% YTD, and 4.1% YoY. Also, as compared to its pre-COVID-19 maximum, the current NAV is 32.2% lower.

In terms of the changes recorded by the Croatian mutual funds’ assets, on a MoM basis, the largest absolute increase was recorded by bond holdings, which grew by EUR 39m, or 3.1%. Following them there are money market holdings, at EUR 8.4m, or 23.4%. On the other hand, inv. funds declined by EUR 5.8m MoM, or 2.9%, deposits and cash by EUR 4.6m, or 2.2%, while shares decreased by EUR 2.3m, or 0.7%. Turning our attention to the YoY basis, the largest absolute increase was recorded by shareholdings, which grew by EUR 91m, or 35.9%, followed by bonds at EUR 42.2m, or 3.3%. On the flipside, deposits and cash decreased by EUR 167m, or 44%, while money market holdings declined by EUR 74m, or 63%.

Total assets of Croatian mutual funds (January 2015 – October 2023, EURm)

Source: HANFA, InterCapital Research

Of course, the change in the value of the asset is only one of the ways that the overall NAV can change. The other 2 are decisions by the fund managers to allocate more or less funds into specific assets, and the net contributions into the funds, dependent on investors of these funds. In October 2023, the overall net contributions amounted to EUR 47m. Of this, balanced, equity, and feeder funds recorded more redemptions of stakes in the funds (meaning people were leaving these funds), at EUR 6.8m, EUR 4.5m, and EUR 2.6m, respectively. On the other hand, the majority of the growth was driven by the other funds’ category, which recorded EUR 59m of net contributions, slightly supported by bond funds, which noted EUR 1.2m of growth.

Turning our attention to securities and deposits, in total, they amounted to EUR 2.01bn during October, of which foreign securities and deposits accounted for 61.9%, and domestic securities and deposits for 38.1%. In terms of changes, on a MoM basis, foreign securities and deposits increased by 3.9%, or EUR 46m, while domestic securities and deposits declined by 5%, or EUR 40m. Meanwhile, on a YoY basis, foreign securities and deposits grew by 37%, or EUR 336m, while domestic securities and deposits declined by 28%, or EUR 293m. As such, we can see that the main drivers of growth in this category were foreign securities and deposits, which domestic ones lagged behind. Finally, looking at the current asset structure of the funds, the majority is still invested in bonds, at 61.9%, representing a 0.9 p.p. increase MoM, and 4.7 p.p. increase YoY. Following them there are shares at 16.3%, decreasing by 0.4 p.p. MoM, but increasing by 4.8 p.p. YoY. Lastly, we have deposits and cash, as well as investment funds, at 9.9% and 9.1% of the total, respectively. These asset types recorded a MoM decrease of 0.38 p.p. and 0.43 p.p., respectively, while on a YoY basis, deposits and cash declined by 7.1 p.p., while inv. funds grew by 0.5 p.p.

Current AUM of Croatian mutual funds (October 2023, % of the total)

Source: HANFA, InterCapital Research