By the end of March 2023, the NAV of the Croatian pension funds amounted to a total of EUR 18.2bn, which would imply an increase of 4.2% YoY and 1% MoM.
The latest report on the developments and changes in the Croatian financial markets has been published by HANFA. In the report, we can see that the total NAV of Croatian pension funds amounted to EUR 18.2bn, which would mean it grew by 1% MoM, and 4.2% YoY. At the same time, the net contributions into the funds amounted to EUR 98.6m during the month, while since the beginning of 2023, they amounted to EUR 284.4m.
Croatian mandatory pension funds AUM structure change (January 2018 – March 2023, EURm)
Source: HANFA, InterCapital Research
Moving on to the changes recorded by the individual asset holdings, on a monthly basis, the largest increase was recorded by bond holdings, which grew by EUR 397.2m, or 3.5%. This increase is to be expected, as the retail bonds issued by the Croatian government (more of which you can read here). The next largest absolute increase was recorded by shares, which grew by EUR 59.3m, or 1.5%, and investment funds, which increased by EUR 20.1m, or 1%. On the other hand, deposits and cash decreased by EUR 233.9m or 36.5%. Again, the influence of the retail bond issuance can be seen here; not only were the new contributions (at least the majority of them) invested in bond holdings, but there was also a reduction in deposit & cash holdings to increase bond, share, and investment fund holdings.
This move can be seen as a prudent one as deposits and cash, even though they carry almost no inherent risk, also yield very little, especially as compared to bond holdings (and especially the retail govt. bonds) but also shares, which have also recorded positive returns since the beginning of the year.
Meanwhile, on a yearly basis, the largest absolute increase was also recorded by bond holdings, which grew by EUR 592.9m, or 5.4%. Following them, we have shares, which increased by EUR 248m, or 6.8%, and money market holdings, which increased by EUR 112.8m, or 129% YoY. On the other hand, deposits and cash decreased by EUR 142.8m or 26% YoY.
Looking at the current asset structure of the pension funds, we can see that bond holdings have the largest majority, holding 64.1% of the total assets, which is an increase of 1.59 p.p. MoM, and 0.69 p.p. YoY. Shareholdings are the next largest category, accounting for 21.5% of the total, an increase of 0.12 p.p. MoM, and 0.51 p.p. YoY. The only other notable category, with over 10% of the total asset holdings, is investment funds, which accounted for 11.4% of the total, remaining unchanged MoM, but decreasing by 0.48 p.p. YoY.
Current AUM of Croatian mandatory pension funds (March 2023, % of the total)
Source: HANFA, InterCapital Research
