By the end of November 2023, the Slovenian mutual funds AUM grew by 7.2% MoM, 18.5% YTD, and 12.8% YoY.
The latest report on the performance of the Slovenian mutual funds, for the month of November 2023 has been released by the Slovenian Securities Market Agency, ATVP. According to the report, the total AUM of Slovenian mutual funds amounted to EUR 4.69bn, growing by 7.2% MoM, 18.5% YTD and 12.8% YoY. This represents the largest MoM growth since November 2020, leading to the mutual funds recording all-time highs on many metrics.
Breaking down the drivers of this growth, on a MoM basis, the largest absolute increase was recorded by shares, which grew by a whopping EUR 261.7m, or 8.5%. Following them, there are bonds, which recorded an increase of EUR 32.7m, or 4.6%, other assets, which increased by EUR 18.3m, or 123%, and cash, which grew by EUR 17.4m, or 9.2%. On the other hand, investment funds recorded a slight decrease of EUR 2.2m, or 8.3%. Moving on to the YoY basis, here the largest increase was once again recorded by shares, which grew by EUR 414m, or 14.2%, followed by bonds at EUR 99m, or 15.4%, and money market holdings, at EUR 52m, or 80%. All other asset holdings remained roughly the same.
Total assets of Slovenian mutual funds (June 2007 – November 2023, EURm)
Source: ATVP, InterCapital Research
Of course, the increase/decrease in the value of these assets inside the funds can be due to several reasons, including the change in the inherent value of the assets, the decisions of the fund managers to allocate more/less into certain assets, and the net contributions to the funds. During November, the net contributions amounted to EUR 46.7m, growing by 2% MoM, and almost 3.7x YoY. On the trailling 12 months basis, the net contributions amounted to EUR 324.1m, a 27.5% increase compared to the same period last year. Also, the number of subscribers kept growing, increasing by 0.4% MoM, and 4.1% YoY, amounting to 529.1k. As such, it could be said that the increase in the value of the funds came from both higher levels of investments from Slovenians, which given the improved economic outlook (for example, the expectation that the ECB might start cutting rates sooner after they decided to postpone rate hike on their last meeting) is a positive development.
Net contributions into the Slovenian mutual funds (January 2016 – November 2023, EURm)
Source: ATVP, InterCapital Research
Delving a little deeper into the largest category of mutual funds, i.e. share holdings, we can see a trend continuing. If we were to break down the equity securities by origin (home issuers or foreign issuers), then we can see that the investments into home issuers’ equity securities are continuing, but they are still a very small part of the entire investment. In fact, in November 2023, the home issuers’ equity securities amounted to EUR 55.3m, representing 1.7% of the total, whilst growing by 0.4% MoM and declining by 3.4% YoY. On the flipside, foreign issuers equity securities amounted to EUR 3.28bn, increasing by 8.6% MoM, and 14.5% YoY.
Equity holdings of Slovenian UCITS funds (October 2007 – November 2023, EURm)
Source: ATVP, InterCapital Research
Finally, taking a look at the current asset structure of these funds, shares still hold the vast majority at 71.3% of the total, growing by 0.87 p.p. MoM, and 0.84 p.p. YoY. The 2nd largest category, bonds, currently hold 15.9% of the total, declining by 0.39 p.p. MoM, but increasing by 0.36 p.p. YoY. Following them there are money market, deposits, and cash holdings at 7.1%, remaining roughly unchanged MoM, but declining by 0.15 p.p. YoY, and investment funds at 5%, which recorded a decrease of 0.85 p.p. MoM, but an increase of 0.36 p.p. YoY.
Taking all of this data together, it would seem that the growth was primarily driven by equity increases, and more specifically, foreign issuers equity securities, but also supported by continued investments coming from Slovenians. As the economic situation improves, and the possibility of interest rate cuts looms, the sentiment is of course more positive than it has been for most of the year. As such, if this trend continues, one could also see further development and growth of the AUM of these funds.
