NAV of Croatian Mandatory Pension Funds up by 5.7% in 2020

As of end December 2020, NAV of Croatian Mandatory Pension funds amounted to HRK 119.07bn.

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. NAV of pension funds has witnessed a steady increase for each consecutive month since April, and as of end 2020 stood at HRK 119.07bn (+5.7% YoY or HRK 6.47bn). To put things into a perspective, such NAV is converging very closely to the entire equity market cap of the Zagreb Stock Exchange (excluding PBZ – to be delisted).

Looking at the MoM performance, NAV of Mandatory Pension funds is up by 0.7% after November noted the best monthly performance in 2020 (+2.1%). 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 December net contribution payments amounted to HRK 606.5m (+3.4% MoM).

Asset Structure of Croatian Mandatory Pension Funds (December 2020)

Source: Croatian Financial Services Supervisory Agency, InterCapital Research

Looking at the asset composition of pension funds, asset managers have not changed significantly their composition in 2020, which can be seen in the graph above. Bonds account for the vast majority of total assets (67.9%) which as of end 2020 amounted to HRK 81.19bn (increase of HRK 383.1m YoY or 0.9%). Shares come next, with 18.4% or HRK 22bn, representing an increase of as much as 10.8% MoM (or HRK 2.15bn). The mentioned increase could be attributed mostly to the solid increase in foreign shares by 23.8% or HRK 1.79bn. Meanwhile, domestic equity is up by 2.9% or HRK 362.3m. Unlike Croatian UCITS funds whose majority of equity holdings are foreign, mandatory pension funds have 57.8% (or HRK 12.7bn) of their equity holdings allocated in domestic shares.

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