The accumulated return on pension assets from 2014 to July 1, 2020 amounted to 78%, with accumulated inflation over the same period of 64%. Thus, the real rate of return provided by the National Bank of the Republic of Kazakhstan as a Fiduciary Manager is 14%. Investment income for this period amounted to more than 30% of the total amount of pension savings, or KZT 3.8 trln.
The amount of pension accumulations of the UAPF is currently close to KZT 12 trln. As you know, it includes pension contributions and investment income.
Pension contributions received to individual pension saving accounts (IPSA), which are kept by the UAPF, are invested by the Fiduciary Manager of pension assets, the National Bank of the Republic of Kazakhstan, in various financial instruments.
In order to minimize risks, the investment portfolio is diversified by types, areas of investment, including currencies. At present, about 2/3 of investments are denominated in KZT and about 1/3 in foreign currency, most of the latter in US dollars.
The amount of pension accumulations of contributors (beneficiaries) is recalculated and revalued on a daily basis in accordance with the results of investment of pension assets.
Investment income includes return in the form of remuneration on securities (deposits and other transactions), return in the form of market revaluation of financial instruments, return in the form of foreign exchange revaluation, return on assets under external management, etc.
For the first half of this year, from January 1 to July 1, 2020, a net investment return of KZT 543.3 bln was credited to contributors' accounts. 69% of accrued income was return in the form of interest on financial instruments, 29% of income came from foreign exchange revaluation of instruments, the rest of the income was obtained as a result of market revaluation, revaluation of other assets and assets under external management.
Starting from March 2020, the change in the exchange rate of the KZ tenge against the US dollar had a great impact on the investment return of pension assets. In March, net investment income amounted to KZT 521.8 bln. Then, starting in April, there was a strengthening of the national currency rate, what caused a negative revaluation compared to the previous rise. However, in June, there was again an increase in net investment return on pension assets by KZT 44.05 bln.
At the same time, we draw your attention to the fact that pension accumulations are long-term investments and it is advisable to analyze the amount of investment income for a period of at least 1 (one) year. Short-term data (daily, monthly, etc.) are not indicative because depend on daily market conditions.
The entire system of investment management and accounting of pension assets is transparent: each contributor has the opportunity to see his investment return in their personal account on the enpf.kz website or in a mobile application. The information on the investment management of UAPF pension assets and on financial instruments in which pension assets of the UAPF are placed, is published on the official website of the UAPF (www.enpf.kz) in the section "Indices / Investment Activity".