By the end of January 2024, the Slovenian mutual funds AUM grew by 3.8% MoM, and 19.5% YoY. It should be noted, however, that the net contributions played a significant role in this growth, contributing 8.8 p.p. to the 19.5% increase. In other words, if investors made no investments into the funds, the “real” growth would be closer to 10.8% YoY.
In the latest report released by the Slovenian Securities Market Agency, ATVP, we can see that the growth of mutual funds in Slovenia continues strongly at the beginning of the new year. In fact, by the end of January 2024, the Slovenian mutual funds recorded an increase in NAV of 3.8% MoM, and 19.5% (or EUR 816m) YoY, ending the month at almost EUR 5bn of NAV. To understand how this growth happened, we should look at the possible drivers of it.
There are two main ways that the NAV of the funds can increase, one being higher net contributions, meaning either more people investing or people who already invested investing some more, but usually, this ends up a combination of these 2 possibilities. The 2nd is the change in the NAV of the funds themselves, which comes from the change in the value of the underlying assets.
Starting off with the net contributions first, in January 2024, they amounted to EUR 48.6m, increasing by 70% MoM, and 131% YoY. Furthermore, in the last twelve months, the net contributions amounted to EUR 365.9m, an increase of 80.4% compared to the same period a year ago. This would mean out of the 19.5% (or EUR 816m) YoY increase in the NAV, 45% came from the net contributions (8.8 p.p. in relative terms to 19.5% growth). Furthermore, the number of subscribers also grew, by 2.4% MoM, and 4.2% YoY, and amounted to 532.8k.
Net contributions into the Slovenian mutual funds (January 2016 – January 2024, EURm)
Source: ATVP, InterCapital Research
That would mean that the remaining 10.8% YoY growth, came from the change in the underlying assets in these funds. Breaking this down further, the largest absolute increase came from shares, which grew by EUR 726m, or 24.8%, followed by bonds at EUR 122m, or 18.5%, as well as the money market holdings, which increased by EUR 74m, or 114%. On the other hand, investment funds recorded a decrease of EUR 66m, or 23.4%, while cash holdings were reduced by EUR 51m or 23.7%.
Meanwhile, on a monthly basis, the largest increase came once again from shares, which grew by EUR 190.8m, or 5.5%, while all the remaining asset classes remained roughly the same, some increasing slightly, while the majority decreased slightly.
Total assets of Slovenian mutual funds (June 2007 – January 2024, EURm)
Source: ATVP, InterCapital Research
Of course, equity holdings are the largest holdings of the Slovenian mutual funds, accounting for app. 73.1% of the total, and having increased by 1.21 p.p. MoM, and 3.10 p.p. YoY. Following them are bonds at 15.7% of the total, with a decrease of 0.61 p.p. MoM, and 0.14 p.p. YoY. Next up, we have the money market, deposits & cash, which accounted for 6.3% of the total, and have decreased by 0.22 p.p. MoM, and 0.69 p.p. YoY. Finally, there are investment funds at 4.3% of the total, with a decrease of 0.35 p.p. MoM, and 2.42 p.p. YoY.
Given that the equity holdings are the largest, it is also prudent to look more closely at how they performed. Roughly speaking, the Slovenian mutual funds’ equity holdings are broken down by origin, i.e. those from home issuers and those from foreign issuers. By the end of January, home issuers’ equity securities amounted to EUR 57.4m, growing by 1.6% MoM, but decreasing by 4.5 p.p. YoY. On the other hand, foreign issuers’ equity securities amounted to EUR 3.59bn, increasing by 5.6% MoM, and 25.5% YoY.
Equity holdings of Slovenian UCITS funds (October 2007 – January 2024, EURm)
Source: ATVP, InterCapital Research
This would mean that besides net contributions, equity holdings, and specifically foreign equity holdings contributed mostly to the growth in the funds, which is to be expected as various foreign markets performed rather well for the last couple of months. This was driven by the better-than-expected economic results, inflationary pressures slowing down, and the expectations that the Central Banks (more specifically, ECB and the Fed) will cut interest rates this year, which of course has a positive impact on equity holdings in particular.
