At the end of August 2022, the total AUM (Assets Under Management) of Slovenian mutual funds equaled EUR 4.07bn, representing a decrease of 1.9% MoM, 6.1% YTD, but an increase of 0.5% YoY.
The Slovenian Securities Market Agency (ATVP) has published the latest monthly report on the developments evidenced by the Slovenian mutual funds. By the end of August 2022, the Slovenian mutual funds had a total of EUR 4.07bn of AUM, representing a decrease of 1.9% MoM, 6.1% YTD, but an increase of 0.5% YoY. This comes after July 2022’s notable increase, during which the mutual funds AUM increased by 6.7% on an MoM basis.
With Slovenian recording an inflation rate of 11% in August 2022, recording no change on the monthly level, we can see that for the moment, the inflation has somewhat stopped its growth. Several factors can be attributed to this; firstly, the decision of the ECB to increase interest rates more aggressively (the most recent increase being 0.75 bps), the EU-wide movement to curb the dependence on Russian gas, as well as the fact that prices of oil and gas have somewhat decreased, due to the worse macroeconomic situation in the world, overall. In a way, investments can be seen as an indirect measure of current market sentiment, with better economic times and stronger outlooks providing more incentive to invest in riskier types of assets. Vice versa is also true during times of economic downturns, or at least times of slower expected growth and uncertainty. Of course, the decrease in total AUM can be due to several things: an overall decrease in the value of assets, the redemption of shares by the investors, or a combination of these two things. While all of this is happening, the switch from riskier (e.g. shares, inv. funds) to less risky (e.g. bonds, deposits) can also be made. A change from investment into foreign or domestic equity, or vice versa, can also happen.
Having all of this in mind, what of these things did happen?
Equity holdings of Slovenian UCITS funds (EURm)
Looking at the equity holdings first, we can see that overall, both domestic and foreign equity holdings decreased, by 13.2% and 2.5% YoY, respectively. This would mean that by the end of August 2022, domestic equity holdings amounted to EUR 59.8m, while foreign equity holdings amounted to EUR 2.78bn.
Total assets of Slovenian mutual funds (EURbn)
Moving on to the asset structure of the Slovenian mutual funds, shares still maintain the vast majority of the total AUM, at 69.5% (or EUR 2.83bn), representing a decrease of 0.1 p.p. MoM, and 0.9 p.p. YoY. Following them, we have bonds, at 15.7% (or EUR 641m) which decreased by 0.2 p.p. MoM but increased by 0.1 p.p. YoY. Investment funds, which account for 7% of the total (or EUR 284m) increased by 0.3 p.p. MoM but decreased by 0.7 p.p. YoY, and finally, money market, deposits & cash, at 7.2% of the total (or EUR 295m), remained roughly the same MoM but increased by 1.7 p.p. YoY.
Finally, taking a look at the number of subscribers and the net contributions, despite the challenging macroeconomic situation, the number of subscribers increased to 505k, representing an increase of 3.73% YoY, while the net contributions into the funds amounted to EUR 20.95m. However, if we looked at the last twelve months, the net contributions amounted to EUR 314.9m, which is a decrease of 15.6% when compared to the same period last year.
Net contributions in Slovenian mutual funds (EURm)
So, as we can see from the August 2022 data, investments in the Slovenian mutual funds are still continuing, with a growing number of subscribers each month. At the same time, however, the net contributions are slowing down, which is to be expected due to the higher inflation rates and lower disposable income of households. The value of equity holdings in the funds is decreasing, both in foreign and domestic equity. This could be both due to the fact that equity, both domestic and foreign, has lost some of its value this year due to the uncertain macroeconomic environment, while at the same time, fund managers are switching investments into less risky types of assets, such as bonds and the money market, deposits, and cash.
