Investment activity on management of pension assets is transparent. On the enpf.kz website in the section “Indicators - Investment activity”, detailed information on the investment of pension assets by the National Bank of the Republic of Kazakhstan (NBRK) and investment portfolio managers (IPM), as well as reviews of investment activity, is monthly posted. The information is currently updated as of May 1, 2022.
It follows from the submitted reports: the total amount of pension assets under management as of May 1, 2022 amounted to about 13.0 trillion tenge. At the same time, UAPF pension assets held in trust by the NBRK amounted to 12,914.3 billion tenge. Pension assets managed by the IPM amounted to 8.9 billion tenge.
Investment portfolio of pension assets managed by the NBRK
As of May 1, 2022, within the framework of the directions approved by the Council for the Management of the National Fund of the Republic of Kazakhstan, the main investments of the NBRK (as a trustee) in financial instruments are as follows:
˗ the main share in the UAPF PA portfolio is occupied by government securities of the Ministry of Finance of the Republic of Kazakhstan, the current value of which amounted to 5,331.96 billion tenge. Their share in the portfolio was 41.29. As of May 1, 2022, the weighted average yield to maturity on government securities of the Ministry of Finance of the Republic of Kazakhstan, denominated in tenge, was 10.8% per annum, in US dollars - 3.4% per annum.
˗ bonds of quasi-state organizations of the Republic of Kazakhstan with a current value of 1,698.75 billion tenge (the share in the portfolio was 13.15%). The weighted average yield to maturity on bonds of quasi-governmental organizations of the Republic of Kazakhstan, denominated in tenge, amounted to 10.8% per annum, in US dollars - 5.5% per annum.
- bonds of second-tier banks of the Republic of Kazakhstan in the amount of 927.44 billion tenge (7.18%). As of the reporting date, the weighted average yield to maturity on bonds of second-tier banks of the Republic of Kazakhstan amounted to 10.7% per annum.
- government securities of foreign states in the liquidity sub-portfolio amounted to 734.24 billion tenge. Their share in the portfolio was 5.69%. The weighted average yield to maturity of government securities of foreign states in the UAPF PA portfolio as of the reporting date was 0.6% per annum.
- bonds of international financial organizations amounted to 401.08 billion tenge. Their share in the portfolio was 3.11%. The weighted average yield to maturity on bonds of international financial organizations was 10.0% per annum.
- the current value of deposits in the National Bank of the Republic of Kazakhstan as of the reporting date amounted to 320.84 billion tenge. Their share in the portfolio was 2.48%. The weighted average yield is 12.79% per annum.
- value of shares and depository receipts of issuers of the Republic of Kazakhstan amounted to 264.77 billion tenge. Their share in the portfolio was 2.05%. In the period under review, there were no purchases and sales of shares and depositary receipts of RK issuers.
- deposits in second-tier banks amounted to 198.55 billion tenge. Their share in the portfolio is 1.54%. The weighted average yield to maturity of deposits of STBs of the Republic of Kazakhstan as of the reporting date was 9.1% per annum.
- cost of corporate bonds of foreign issuers amounted to 4.46 billion tenge. Their share in the portfolio was 0.03%. The weighted average yield to maturity of corporate bonds of foreign issuers in the UAPF PA portfolio as of the reporting date was 10.5% per annum.
- cost of PPN (structured notes) of foreign issuers in the reporting month amounted to 11.22 billion tenge. Their share in the portfolio was 0.09%. There were no sales, redemptions or purchases of PPN (structured notes) of foreign issuers.
- cost of corporate bonds of issuers of the Republic of Kazakhstan amounted to 16.25 billion tenge. Their share in the portfolio was 0.13%. There were no purchases, sales and redemptions of corporate bonds of RK issuers in the period under review.
The investment portfolio, broken down by currencies into which financial instruments purchased using pension assets, is denominated as follows:
investments in the national currency - 68.26%, in US dollars - 31.67%, in other currencies - 0.07% of the portfolio of pension assets.
As a result of investment activities, as well as due to the volatility of foreign exchange rates and changes in the market value of financial instruments, the amount of accrued investment income since the beginning of 2022 has been positive and amounted to 136.52 billion tenge.
Against the background of the aggravation of the geopolitical situation, increased volatility in global financial markets, accelerating inflation, as well as changes in the value of securities of developed and developing countries, the profitability of UAPF pension assets distributed to the accounts of depositors (beneficiaries) since the beginning of 2022 amounted to 0.88%.
At the same time, the profitability of pension assets for the last 12 months (from May 2021 to April 2022) for UAPF contributors (beneficiaries) amounted to 8.00%.
The cumulative return for the period of pension assets management by the National Bank - from April 2014, when the consolidation of pension assets was completed, to April 2022 - amounted to 104.45%. For 8 years from 2014 to 2021, the average annual return on UAPF pension assets is 9.68% per annum.
The investment return from the day the funded pension system was founded (1998) as of May 1, 2022, on an accrual basis, amounted to 688.00%, with inflation for the entire period of 593.98%. Thus, the real (i.e., exceeding inflation) return on pension assets for the period from the start of the funded pension system as of May 1, 2022 amounted to 94.02%.
A detailed structure of the investment portfolio of financial instruments managed by the NBRK, indicating issuers and an overview of investment activities, are posted on the official website of the UAPF.
Recall that in Kazakhstan there is a model of the state guarantee of the safety of pension accumulations. In accordance with Article 5 of the Law of the Republic of Kazakhstan "On Pension Provision in the Republic of Kazakhstan", the state guarantees beneficiaries the safety of mandatory pension contributions and mandatory professional pension contributions to the UAPF in the amount of contributions actually made, taking into account the inflation rate at the time of obtaining the right to pension benefits.
Investment portfolio managers
The total amount of funds under the management of IPM is 8.9 billion tenge.
Pension assets held in trust by Jusan Invest JSC amounted to 4.06 billion tenge. They were used to purchase: cash on investment accounts (38.06%), shares of Exchange Traded Funds (ETF) they account for 33.09%, government securities of the Ministry of Finance of the Republic of Kazakhstan (17.86%), NBRK notes (10.98% of the portfolio). Note that 62.18% of the portfolio is presented in tenge, 37.82% in US dollars.
As a result of investment activity, the profitability of pension assets managed by Jusan Invest JSC has amounted to 1.38% since the beginning of the year.
A detailed structure of the investment portfolio of financial instruments managed by Jusan Invest JSC, indicating issuers, is presented on the UAPF website.
As of May 1, 2022, pension assets held in trust by Halyk Global Markets JSC amounted to 2.50 billion tenge. In the portfolio structure, cash on accounts is 53.34%, equity instruments of foreign issuers (ETF Units) 15.77%, bonds of quasi-governmental organizations of the Republic of Kazakhstan 10.50%, shares and depositary receipts of foreign issuers 6.13%, bonds of second-tier banks of RK 5.58%, corporate bonds of RK organizations 4.37%, MFIs 4.29%, other assets (accounts receivable, overdue debt, provisions) 0.02%. Investments in the national currency amounted to 78.06% of the portfolio, in US dollars - 21.94%. Profitability of pension assets managed by Halyk Global Markets JSC from 01.01.2022 to 30.04.2022 amounted to (-2.64%).
A detailed structure of the investment portfolio of financial instruments managed by Halyk Global Markets JSC with indication of issuers is presented on the UAPF website.
Pension assets held in trust by BCC Invest JSC as of May 1 this year amounted to 1.43 billion tenge. They are distributed in cash on investment accounts 39.17%, shares (ETF for indices) 22.51%, bonds of quasi-governmental organizations of the Republic of Kazakhstan 12.68%, shares and depositary receipts of foreign issuers 9.20%, bonds of MFIs 5.95% , bonds of second-tier banks of the Republic of Kazakhstan 5.33%, corporate bonds of issuers-residents of the Republic of Kazakhstan 5.09%, other assets (accounts receivable, overdue debt, provisions) 0.07%. 68.29% of the portfolio was invested in instruments in national currency, 31.77% in US dollars.
As a result of investment activities, the profitability of pension assets managed by JSC "BCC Invest" since the beginning of this year amounted to (-2.07%).
A detailed structure of the investment portfolio of financial instruments managed by BCC Invest JSC, indicating issuers, is presented on the UAPF website.
As of May 1, 2022, UAPF pension assets held in trust by Centras Securities JSC amounted to 0.89 billion tenge. They are invested in government securities of the Ministry of Finance of the Republic of Kazakhstan 56.07%, bonds of quasi-state organizations of the Republic of Kazakhstan 14.78%, shares and depositary receipts of issuers of the Republic of Kazakhstan 10.82%, REPO 8.41%, cash on investment accounts 7.80%, equity instruments of foreign issuers (ETF Units) 2.01%, other assets (accounts receivable, overdue debt, provisions) 0.12%. 90.46% of the portfolio was invested in instruments in national currency, 9.54% in US dollars.
As a result of investment activities, the profitability of pension assets managed by JSC Centras Securities since the beginning of 2022 amounted to (-4.26%).
A detailed structure of the investment portfolio of financial instruments managed by Centras Securities JSC with indication of issuers is presented on the UAPF website.
Recall that after receiving pension assets from the UAPF, IPM invests them in permitted financial instruments specified in the Rules for the implementation of investment portfolio management activities, approved by the Resolution of the Board of the National Bank of the Republic of Kazakhstan dated February 3, 2014 No. 10, and provided for in the Investment Declaration of IPM.
When transferring pension accumulations to IPM, the guarantee of the state is replaced by the guarantee of the management company to ensure the minimum level of profitability of pension assets. The minimum level of return is calculated on the basis of the weighted average return on pension assets transferred to IPM operating on the market.