By the end of March 2024, the Slovenian mutual funds recorded an increase of 3.8% MoM, and 29% YoY, marking another month of strong growth. This would mean that the NAV amounted to EUR 5.43bn, also marking the largest increase since December 2021.
The latest report on the performance of the Slovenian mutual funds, for March 2024 has been published by the Slovenian Securities Market Agency, ATVP. According to the report, the NAV of the Slovenian mutual funds increased by 3.8% MoM, and 29% YoY, amounting to EUR 5.43bn. This would mean that the stable and strong growth that we have witnessed in the last couple of months continued, in line with the growth trends across both domestic and foreign markets.
To understand what drove the growth in these assets, we can take a look at the factors influencing it. In the case of mutual funds, this includes the net contributions as well as the change in the value of the underlying assets. Starting off with the net contributions, in March 2024 they amounted to EUR 50.6m, increasing by 11% MoM, and 83% YoY. Furthermore, in the last twelve months ending in March, the net contributions amounted to EUR 408.6m, representing an increase of 83.5% YoY. If we compare it to the absolute amount change of the funds on the MoM and YoY basis, which amounted to EUR 197m and EUR 1.2bn, respectively, we can see that app. 26% of the monthly growth, and 33% of the YoY growth came from the net contributions into the Slovenian mutual funds. It should also be noted that the increase in net contributions came not only from higher investments from existing subscribers but also due to the funds managing to attract new subscribers. In March 2024, the number of subscribers to the Slovenian mutual funds amounted to 539k, representing an increase of 0.6% MoM, and 4.7% YoY, which is in line with what we’ve seen in the previous several months.
Net contributions into the Slovenian mutual funds (January 2016 – March 2024, EURm)
Source: ATVP, InterCapital Research
This would also mean that the remaining growth in the NAV came from the increase in the value of assets. Breaking the asset growth down further, on a MoM basis, shares increased by EUR 160m, or 4.1%, followed by other assets category at EUR 61.7m, or 188%. On the other hand, bonds decreased by 14.4m, or 1.9%, while cash holdings declined by EUR 10.5m or 7.1%.
Meanwhile, on the YoY basis, the largest absolute increase by far came from shareholdings, which grew by EUR 1.1bn, or 37.7%, followed by other assets at EUR 78m, or over 4.6x, bonds, at EUR 72m, or 10.5%, as well as the money market holdings, at EUR 66m, or 88.5%. On the other hand, investment funds and cash holdings decreased, by EUR 77m and EUR 33m, respectively, or in relative terms, by 27.3% and 19.3%, respectively.
Total assets of Slovenian mutual funds (June 2007 – March 2024, EURm)
Source: ATVP, InterCapital Research
Of course, it isn’t surprising that the shares grew the most in the Slovenian mutual funds, as not only do they make the largest holding by far, but they also experienced a rather strong recovery and growth, both for domestic and global shares in the previous 6 months or so. In fact, shares make up app. 75% of all holdings in Slovenian mutual funds, with an increase of 0.2 p.p. MoM, and 4.7 p.p. YoY. Following them we have bonds at 14.1%, with a decline of 0.8 p.p. MoM, and 2.4 p.p. YoY, as well as the money market, deposits & cash holdings at 5.3%, again decreasing by 0.4 p.p. MoM, and 0.8 p.p. YoY.
As such, it could be said that more focus has been put on equity holdings by the Slovenian mutual fund managers, and surely the larger piece of the net contributions went into equity funds. Taking a quick look at the equity holdings, we can see that the vast majority of equity investments are made into foreign issuers’ equity, at 98.4%, while domestic issuers’ equity made up only 1.6%. However, if we look at their growth rates, the domestic issuers’ equity grew by 14% MoM, and 6.6% YoY, while foreign issuers’ equity increased by 3.9% MoM, and 38.3% YoY.
Equity holdings of Slovenian UCITS funds (October 2007 – March 2024, EURm)
Source: ATVP, InterCapital Research
Because of these changes, it could be said that the primary drivers of growth in the Slovenian mutual funds are the equity holdings, and given the relatively good performance they have recorded in the last couple of months, this is unlikely to stop. Of course, some risk still remains. Many geopolitical and macroeconomic situations, such as the conflicts in Ukraine and the Middle East, as well as the possibility of inflation remaining elevated thus leading to longer periods of higher interest rates, could derail this growth trend, but this has yet to materialize.
