At the end of June 2023, the NAV of the Croatian Mutual Funds equaled EUR 18.9bn, which is an increase of 10% YoY, and 1.8% MoM.
Yesterday, the Croatian Financial Services Supervisory Agency, HANFA, published its latest monthly report detailing the changes and developments recorded by the Croatian financial markets, including the data for the pension funds, for June 2023. In the report, we can see that the NAV of the Croatian pension funds amounted to EUR 18.9bn, representing an increase of 1.8% (or EUR 332.9m) MoM, and 10% (or EUR 1.72bn) YoY. At the same time, the net contributions into the pension funds amounted to EUR 103.5m for June 2023, while since the beginning of the year, it amounted to EUR 595.8m.
Croatian mandatory pension funds AUM structure change (January 2018 – June 2023, EURm)
Source: HANFA, InterCapital Research
Taking a look at the changes recorded by asset classes, we can see that on a monthly basis, the largest absolute growth was recorded by bonds, which grew by EUR 173.4m, or 1.5%, followed by other assets, at EUR 159.5m, or 332%, and shares, at EUR 139.9m, or 3.5%. On the other hand, deposits and cash decreased by EUR 165.2m or 27.8%. Given the fact that the pension funds have high cash inflows due to the structure of the pension system, the changes in value can come from one of two things: the increase/decrease in the inherent value of the underlying assets, or the decision of pension fund managers to increase/decrease their position in a certain asset holding. 2023 has thus far, despite the still challenging macroeconomic and geopolitical situation, marked a period of positive returns, both for equities and bonds. As such, it shouldn’t be surprising that more investments were made into riskier assets, such as bonds and especially shares, and less into the less risky assets such as deposits and cash.
Moving on to the yearly basis, the largest absolute growth was once again recorded by bonds, which increased by EUR 664.7m, or 6%, followed by shares at EUR 644.3m, or 18.5%, as well as investment funds, at EUR 328.7m, or 15.6%, and the money market holdings, with EUR 275.6m, or an increase of over 6.2x YoY.
In terms of the current asset structure of the pension funds, bonds accounted for 62.3% of the total, a decrease of 0.18 p.p. MoM, and 2.38 p.p. YoY. Following them we have shares at 21.8%, an increase of 0.36 p.p. MoM, and 1.56 p.p. YoY, as well as investment funds, at 11.4%, an increase of 0.27 p.p. MoM, and 0.77 p.p. YoY.
Current AUM of Croatian mandatory pension funds (June 2023, % of the total)
Source: HANFA, InterCapital Research
