By the end of December 2022, the Slovenian mutual funds AUM equaled EUR 3.95bn, which is a decrease of 8.8% YoY, and 4.8% MoM.

The Slovenian Securities Market Agency, ATVP, has recently published the latest report on the changes recorded by the Slovenian mutual funds, for December 2022, and as such, the data for the entire of 2022. As 2022 has been marked by a lot of uncertainty due to high inflation rates, the deteriorating macroeconomic situation, and the war in Ukraine, among others, it is interesting to see how the Slovenian mutual funds performed during this period. Looking at the data, by the end of 2022, the assets under management (AUM) of Slovenian mutual funds amounted to EUR 3.95bn, representing a decrease of 4.8% MoM, and 8.8% YoY.

Looking at the investments inside the funds, the majority of them are still maintained inside shareholdings, which accounted for 69.6% of the total, or EUR 2.75bn. This represents an 0.8 p.p. decrease in MoM, and 1.7 p.p. YoY. Following them, we have bonds at 16.4% of the total, or EUR 648m, an increase of 0.9 p.p. MoM, and 1.1 p.p. YoY, and the money market, deposits & cash, at 7.5% of the total (or EUR 297m), representing an increase of 0.2 p.p. MoM, and 1.7 p.p. YoY. Finally, we have investment funds, at 5.8% of the total, or EUR 229m, representing a decrease of 0.4 p.p. MoM, and 1.5 p.p. YoY.

In absolute terms, on a YoY basis, shares declined by EUR 341m, or 11%, followed by investment funds at EUR 87m, or 28%. On the other hand, the largest increase was recorded by the money market, deposits & cash, which increased by EUR 47m, or 19%. On an MoM basis, the most significant absolute decrease was recorded by shares, which declined by EUR 174m, followed by investment funds, at EUR 27m. No other asset class recorded significant growth/decline on an MoM basis.

Total assets of Slovenian mutual funds (June 2007 – December 2022, EURm)

Source: ATVP, InterCapital Research

However, even though it can be seen that equity holdings were the ones that declined the most during the month, we can look at this more closely by breaking them down into domestic and foreign issuers’ equity securities. If we look at it this way, we can see that domestic equity securities amounted to EUR 55.9m in December 2022, representing a decrease of 2.2% MoM, and 21.5% YoY. On the other hand, foreign issuers’ equity securities amounted to EUR 2.70bn, representing a decrease of 6% MoM, and 11% YoY.

Equity holdings of Slovenian UCITS funds (October 2007 – December 2022, EURm)

Source: ATVP, InterCapital Research

This would mean that by far, the largest driver of the decline in December was the foreign equity holdings of the mutual funds. Furthermore, if we looked at the net contributions to the funds for this month, they amounted to EUR 14.4m. If we looked at the entire 2022, this number would amount to EUR 208m, a decrease of 57% YoY. This would mean that the decrease in equity was driven by the decrease in the value of the assets themselves, which makes sense considering that the current macroeconomic and geopolitical situation is putting a lot of pressure on equity markets across the world. Also, when it comes to net contributions, 2021 was a year of strong recovery and growth for the equity markets, and as such, the sentiment was quite positive, leading to a lot of investors entering the space, thus leading to a higher amount of redemptions. In fact, 2021 is quite an outlier in this regard, as net contributions in 2020 amounted to EUR 163m (meaning that 2022 was 28% higher compared to it), while in 2019 they amounted to EUR 68.9m, meaning that in 2022, they were over 2x higher than it. Of course, it could be argued that the net contributions should grow over time, as the market develops and attracts new investors (or in the case of mutual funds, subscribers). This is in fact, the case, at least when it comes to subscribers, as the total number of subscribers grew by 3.1% YoY in December 2022, 9.3% compared to 2020, and 11.8% compared to 2019. All of this combined would again, reinforce the fact that the decrease came mainly as a result of a decline in value.

Net contributions into the Slovenian mutual funds (January 2016 – December 2022, EURm)

Source: ATVP, InterCapital Research