INFORMATIONAL MESSAGE
Investment portfolios of pension assets managed by the NBK and UIP as of June 1, 2022
Pension asset management investment activities are transparent. On the enpf website.kz in the "Indicators – Investment Activity" section, detailed information on the investment of pension assets by the National Bank of the Republic of Kazakhstan (NBK) and investment portfolio managers (IPM), as well as investment activity reviews, is posted monthly. At the moment, the information is updated as of June 1, 2022.
It follows from the submitted reports: the total amount of pension assets under management as of June 1, 2022 amounted to about 12.8 trillion tenge. At the same time, the pension assets of the UAPF held in trust by the NBK amounted to KZT 12,747.21 billion. Pension assets under the management of the UIP amounted to 8.7 billion tenge.
Investment portfolio of pension assets managed by the NBK
As of June 1, 2022, within the framework of the directions approved by the Management Council of the National Fund of the Republic of Kazakhstan, the main investments of the NBK (as a trustee) in financial instruments are as follows:
The main share in the portfolio of the UAPF PA is occupied by state securities of the Ministry of Finance of the Republic of Kazakhstan, the current value of which amounted to 5,329.37 billion tenge. Their share in the portfolio was 41.81%. As of June 1, 2022, the weighted average yield to maturity on government securities of the Ministry of Finance of the Republic of Kazakhstan denominated in tenge amounted to 10.8% per annum, in US dollars – 3.4% per annum.
bonds of quasi-governmental organizations of the Republic of Kazakhstan have a current value of 1,696.39 billion tenge (the share in the portfolio was 13.31%). The weighted average yield to maturity on bonds of quasi–governmental organizations of the Republic of Kazakhstan denominated in tenge amounted to 10.9% per annum, in US dollars - 5.5% per annum.
- bonds of second-tier banks of the Republic of Kazakhstan in the amount of 931.25 billion tenge (7.31%). As of the reporting date, the weighted average yield to maturity on the bonds of the STB RK amounted to 10.5% per annum.
- government securities of foreign states in the liquidity sub-portfolio amounted to 686.27 billion tenge. Their share in the portfolio was 5.38%. The weighted average yield to maturity of foreign state securities in the portfolio of the UAPF PA at the reporting date was 0.8% per annum.
- bonds of international financial organizations amounted to KZT 399.86 billion. Their share in the portfolio was 3.14%. The weighted average yield to maturity on bonds of international financial organizations amounted to 9.80% per annum.
- the current value of deposits in the National Bank of the Republic of Kazakhstan at the reporting date amounted to 397.92 billion tenge. Their share in the portfolio was 3.12%. Weighted average yield of 13.19% per annum.
- the value of shares and depositary receipts of issuers of the Republic of Kazakhstan amounted to 221.18 billion tenge. Their share in the portfolio was 1.74%. In the period under review, there were no purchases and sales of shares and depositary receipts of issuers of the Republic of Kazakhstan.
- deposits in second-tier banks amounted to KZT 198.89 billion. Their share in the portfolio is 1.56%. The weighted average yield to maturity of deposits of STB RK at the reporting date was 9.1% per annum.
- the value of corporate bonds of foreign issuers amounted to 5.28 billion tenge. Their share in the portfolio was 0.04%. The weighted average yield to maturity of corporate bonds of foreign issuers in the portfolio of PA UAPF at the reporting date was 9.6% per annum.
- the cost of PPN (structural notes) foreign issuers in the reporting month amounted to 11.14 billion tenge. Their share in the portfolio was 0.09%. Sales, repayments and purchases of PPN (structural notes) there were no foreign issuers.
- the value of corporate bonds of issuers of the Republic of Kazakhstan amounted to 16.41 billion tenge. Their share in the portfolio was 0.13%. In the period under review, there were no purchases, sales and repayments of corporate bonds of issuers of the Republic of Kazakhstan.
In addition, the structure of the investment portfolio includes REPO of KZT 135.27 billion (1.06% share in the portfolio), cash on investment accounts of KZT 12.62 billion (0.10%) and index asset management of KZT 2,705.36 billion (21.22%), including state securities of developed countries, state securities of developing countries, assets under external management.
The investment portfolio in the context of currencies in which financial instruments purchased at the expense of pension assets are denominated is presented as follows:
investments in the national currency – 70.87%, in US dollars – 29.05%, in another currency – 0.08% of the portfolio of pension assets.
The amount of accrued investment income since the beginning of 2022 has been negative and amounted to 154.09 billion tenge. The main reasons for negative investment income according to the NBK review are:
the growth of yields (decrease in prices) on bonds of developed and developing countries, including government securities of the Republic of Kazakhstan, against the background of the increase in the key rate of the US Federal Reserve this year by 75 bps to 1.0% and the growth of geopolitical tensions;
the decline in the global stock market against the background of the accelerated curtailment of incentives by the US Federal Reserve and other central banks in the fight against inflation in the world, as well as the risks of recession in the economy and lower profits (the MSCI World index, which is the benchmark for external pension asset managers by stock mandates, decreased by more than 12%);
strengthening of the tenge exchange rate at the reporting date from the beginning of the year by 4.0% from 431.8 to 414.67 tenge per US dollar (about 30% of pension assets are denominated in foreign currency, including assets under external management).
As a result of the above factors, the profitability of the pension assets of the UAPF, distributed to the accounts of depositors (recipients) since the beginning of 2022, amounted to (-1.35%).
At the same time, as of June 1, 2022, the profitability of pension assets for the last 12 months (from June 2021 to May 2022) for UAPF depositors (recipients) amounted to 4.14%.
The accumulated yield for the period from April 2014, when the consolidation of pension assets was completed, to May 2022 amounted to 99.94%. For 8 years from 2014 to 2021, the annual return on pension assets of the UAPF is 9.68% per annum.
It is worth emphasizing that pension savings 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 (weekly, monthly, etc.) are not indicative, because they depend on constant changes in market conditions.
The detailed structure of the investment portfolio of financial instruments managed by the NBK with the indication of issuers and an overview of investment activities are posted on the official website of the UAPF.
Recall that Kazakhstan has a model of the state guarantee of the safety of pension savings. In accordance with Article 5 of the Law of the Republic of Kazakhstan "On Pension Provision in the Republic of Kazakhstan", the State guarantees recipients the safety of mandatory pension contributions and mandatory occupational pension contributions to the UAPF in the amount of contributions actually made, taking into account the inflation rate at the time of receiving the right to pension payments.
Investment Portfolio Managers
The total amount of funds under the management of the UIP is 8.7 billion tenge.
Pension assets held in trust by JSC "Jusan Invest" amounted to 3.94 billion tenge. They were used to purchase: cash on investment accounts (45.98%), shares of Exchange Traded Funds (ETFs), they make up 31.44%, state securities of the Ministry of Finance of the Republic of Kazakhstan (18.37%), NBK notes (4.21% of the portfolio). Note that 64.04% of the portfolio is represented in tenge, 35.96% in US dollars.
As a result of investment activity, the profitability of pension assets under the management of JSC "Jusan Invest" since the beginning of the year amounted to (-1.10%).
The detailed structure of the investment portfolio of financial instruments managed by JSC "Jusan Invest" with the indication of issuers is presented on the UAPF website.
Pension assets held in trust by Halyk Global Markets JSC amounted to KZT 2.47 billion as of June 1, 2022. In the portfolio structure, funds on accounts account for 53.98%, equity instruments of foreign issuers (ETF units) 14.85%, bonds of quasi-governmental organizations of the Republic of Kazakhstan 10.73%, shares and depositary receipts of foreign issuers 5.88%, bonds of second-tier banks of the Republic of Kazakhstan 5.71%, corporate bonds of organizations of the Republic of Kazakhstan 4.47%, MFIs 4.39%. Investments in the national currency accounted for 78.20% of the portfolio, in US dollars - 20.80%. The profitability of pension assets under the management of JSC "Halyk Global Markets" from 01.01.2022 to 01.06.2022 was (-3.73%).
The detailed structure of the investment portfolio of financial instruments managed by Halyk Global Markets JSC with the indication of issuers is presented on the UAPF website.
Pension assets held in trust by JSC "BCC Invest" amounted to 1.41 billion tenge as of June 1 of this year. They are distributed in government bonds 32.65%, shares (ETFs for indices) 21.54%, bonds of quasi-governmental organizations of the Republic of Kazakhstan 12.98%, shares and depositary receipts of foreign issuers 8.68%, funds in investment accounts 7.30%, bonds of MFIs 6.10%, bonds of STB of the Republic of Kazakhstan 5.46%, corporate bonds of issuers-residents of the Republic of Kazakhstan 5.22%, other assets (accounts receivable, overdue debts, provisions) 0.06%. 69.71% of the portfolio was invested in instruments in the national currency, 30.29% in US dollars.
As a result of investment activity, the profitability of pension assets under the management of JSC "BCC Invest" since the beginning of this year has been (-3.53%).
The detailed structure of the investment portfolio of financial instruments managed by JSC "BCC Invest" with the indication of issuers is presented on the UAPF website.
As of June 1, 2022, the pension assets of the UAPF held in trust by Centras Securities JSC amounted to KZT 0.90 billion. They are invested in the State securities of the Ministry of Finance of the Republic of Kazakhstan 56.85%, bonds of quasi-governmental organizations of the Republic of Kazakhstan 14.07%, cash on investment accounts 10.65%, shares and depositary receipts of issuers of the Republic of Kazakhstan 9.28%, REPO 7.03%,