INFORMATIONAL MESSAGE
Investment portfolios of pension assets managed by the NBK and UIP as of August 1, 2022
Investment activity for pension asset management is transparent. On the enpf website.kz in the section "Indicators – Investment activity", 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 August 1, 2022.
The reports presented show that the total amount of pension assets under management as of August 1, 2022, amounted to about 13.7 trillion tenge. At the same time, the pension assets of the UAPF, which are in the trust management of the NBK, amounted to 13,656.00 billion tenge. Pension assets under the management of the UIP amounted to 9.06 billion tenge.
Investment portfolio of pension assets managed by the NBK
As of August 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 6 000,60 billion tenge. Their share in the portfolio was 43.94%. As of August 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 11.4% per annum, in US dollars – 3.4% per annum.
bonds of quasi-governmental organizations of the Republic of Kazakhstan have a current value of 1,703.79 billion tenge (the share in the portfolio was 12.48%). 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 935.95 billion tenge (6.85%). As of the reporting date, the weighted average yield to maturity on the bonds of the STB RK amounted to 10.4% per annum.
- bonds of international financial organizations amounted to 395.46 billion tenge. Their share in the portfolio was 2.90%. The weighted average yield to maturity on bonds of international financial organizations amounted to 9.70% per annum.
- the current value of deposits in foreign banks at the reporting date amounted to 578.45 billion tenge. Their share in the portfolio was 4.24%. There was no repayment of deposits in foreign banks.
- the current value of deposits in the National Bank of the Republic of Kazakhstan at the reporting date amounted to 262.30 billion tenge. Their share in the portfolio was 1.92%. The weighted average yield is 13.21% per annum.
- government securities of foreign states in the liquidity sub-portfolio amounted to 257.63 billion tenge. Their share in the portfolio was 1.89%. The weighted average yield to maturity of foreign state securities in the portfolio of the UAPF PA at the reporting date was 2.9% per annum.
In addition, the structure of the investment portfolio includes shares and depositary receipts of issuers of the Republic of Kazakhstan 260.34 billion tenge (1.91% share in the portfolio), deposits in the STB of the Republic of Kazakhstan 201.87 billion tenge (1.48%), corporate bonds of issuers of the Republic of Kazakhstan 16.14 billion tenge (0.12%), PPN 11.47 billion tenge (0.08%), corporate bonds foreign issuers 6.13 billion tenge (0.04%), cash on investment accounts 3.27 billion tenge (0.02%).
The investment portfolio in the context of currencies in which financial instruments acquired at the expense of pension assets are denominated is presented as follows:
investments in the national currency – 68.97%, in US dollars – 30.95%, in another currency – 0.07% of the portfolio of pension assets.
As a result of investment activity, 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 amounted to 519.54 billion tenge.
Against the background of the aggravation of the geopolitical situation, increased volatility in global financial markets, accelerating inflation, as well as rising yields on bonds of developed and developing countries, the yield of pension assets of the UAPF, distributed to depositors (recipients) accounts since the beginning of 2022, amounted to 3.71%.
At the same time, as of August 1, 2022, the profitability of pension assets for the last 12 months (from August 2021 to July 31, 2022) for UAPF depositors (recipients) amounted to 8.24%.
The accumulated yield for the period from April 2014, when the consolidation of pension assets was completed, to the end of July 2022 amounted to 110.19%. 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, indicating 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 9.06 billion tenge.
Pension assets held in trust by JSC "Jusan Invest" amounted to 4.05 billion tenge. They were used to purchase: shares of Exchange Traded Funds (ETFs), they make up 31.68%, cash on investment accounts (26.38%), state securities of the Ministry of Finance of the Republic of Kazakhstan (17.30%), NBK notes (15.01% of the portfolio), REPO (9.64% of the portfolio). Note that 63.14% of the portfolio is represented in tenge, 36.86% 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 1.26%.
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 2.56 billion as of August 1, 2022. In the portfolio structure, reverse repo (no more than 90 calendar days) is 52.50%, equity instruments of foreign issuers (ETF units) 15.13%, bonds of quasi-governmental organizations of the Republic of Kazakhstan 10.82%, shares and depositary receipts of foreign issuers 6.02%, bonds of second-tier banks of the Republic of Kazakhstan 5.64%, MFIs 4.69%, corporate bonds of organizations of the Republic of Kazakhstan 4.43%, cash on accounts 0.75%, other assets 0.02%. Investments in the national currency accounted for 78.74% of the portfolio, in US dollars - 21.26%. The profitability of pension assets under the management of JSC "Halyk Global Markets" from 01.01.2022 to 01.08.2022 was (-0.16%).
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 1.49 billion tenge as of August 1 of this year. They are distributed in government bonds of the Republic of Kazakhstan 40.34%, shares (ETFs for indices) 21.05%, bonds of quasi-governmental organizations of the Republic of Kazakhstan 10.46%, shares and depositary receipts of foreign issuers 8.91%, bonds of MFIs 6.09%, bonds of STB of the Republic of Kazakhstan 5.31%, corporate bonds of issuers-residents of the Republic of Kazakhstan 5.09%, cash on investment accounts 2.68%, other assets (accounts receivable, overdue debts, provisions) 0.07%. 69.77% of the portfolio was invested in instruments in the national currency, 30.23% 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 amounted to 0.50%.
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 August 1, 2022, the pension assets of the UAPF held in trust by Centras Securities JSC amounted to 0.95 billion tenge. They are invested in the State Securities of the Ministry of Finance of the Republic of Kazakhstan 54.21%, cash on investment accounts 18.74%, REPO 15.98%, shares and depositary receipts of issuers of the Republic of Kazakhstan 9.22%, equity instruments of foreign issuers (ETF units) 1.86%. 82.41% of the portfolio was invested in instruments in the national currency, 17.59% in US dollars.
As a result of investment activity, the profitability of pension assets under the management of Centras Securities JSC since the beginning of 2022 amounted to 0.34%.
The detailed structure of the investment portfolio of financial instruments managed by Centras Securities JSC with the indication of issuers is presented on the UAPF website.
Recall that after receiving pension assets from the UAPF, the UIP invests them in authorized financial instruments specified in the Rules for the Implementation of Investment Portfolio Management Activities approved by Resolution No. 10 of the Board of the National Bank of the Republic of Kazakhstan dated February 3, 2014, and provided for in the Investment Declaration of the UIP.
When transferring pension savings to the management of the UIP, the guarantee of the state is replaced by the guarantee of the management company to ensure a minimum level of profitability of pension assets. The minimum level of profitability is calculated based on the weighted average yield of pension assets transferred to the management of the UIP operating in the market.
Video commentary on the topic is available on the YouTube channel of the BZHZK ENPF at the link.