INFORMATIONAL MESSAGE
Investment portfolios of pension assets managed by the NBK and UIP
as of March 1, 2023
Investment activity on pension asset management is absolutely transparent and available for review. On the enpf website.kz in the "Indicators – Investment Activity" section, detailed information on the management 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 March 1, 2023.
The total amount of pension assets under management as of March 1, 2023, amounted to about 15.13 trillion tenge. At the same time, the pension assets of the UAPF, which are in the trust management of the National Bank of the Republic of Kazakhstan (hereinafter – the NBK), amounted to 15.12 trillion tenge. Pension assets under the management of the UIP amounted to 9.6 billion tenge.
Investment portfolio of pension assets managed by the NBK
As of March 1, 2023, the structure of the main investments of the NBK, as a trustee, for financial instruments is as follows:
• State securities of the Ministry of Finance of the Republic of Kazakhstan with a current value of KZT 7,240.89 billion (the main share in the portfolio is 47.89%)
• bonds of quasi-governmental organizations of the Republic of Kazakhstan with a current value of KZT 1,684.42 billion (the share in the portfolio is 11.14%)
• bonds of second-tier banks of the Republic of Kazakhstan with a current value of KZT 892.96 billion (the share in the portfolio is 5.91%)
• government securities of foreign states in the liquidity sub-portfolio with a current value of 743.91 billion tenge (the share in the portfolio is 4.92%).
• deposits in the National Bank of the Republic of Kazakhstan with a current value of 391.72 billion tenge (share in the portfolio - 2.59%)
• bonds of international financial organizations with a current value of 372.61 billion tenge (share in the portfolio - 2.46%)
• shares and depositary receipts of issuers of the Republic of Kazakhstan with a current value of KZT 250.51 billion (share in the portfolio - 1.66%)
• deposits in the STB of the Republic of Kazakhstan with a weighted average maturity of 1.53 years, with a current value of KZT 201.08 billion (share in the portfolio - 1.33%).
As of 01.03.2023, the weighted average yield to maturity (YTM) of debt financial instruments held in the investment portfolio of pension assets of the UAPF amounted to 11.0% per annum, including those denominated in tenge - 12.6% per annum, in foreign currency - 4.9% per annum.
The structure of the investment portfolio of pension assets of the UAPF held in trust by the NBK, in terms of currencies as of March 1, 2023, looks like this: investments in national currency - 72.22%, in US dollars - 27.73%%, in another currency - 0.05% of the portfolio of pension assets.
It should be noted that in the structure of investment income, 318.2 billion tenge is income in the form of remuneration on securities, including on deposits placed and reverse repo operations and from market revaluation of securities, other income is 0.18 billion tenge. And the instruments that are under external management and related to the revaluation of foreign currency brought losses in the amount of 108 billion tenge, which is the result of the influence of geopolitical factors on the investment income received this year. However, the total income for 2 months of 2023 became positive.
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 as of March 1, 2023 since the beginning of this year amounted to 210.19 billion tenge.
Against the background of an unstable geopolitical situation, high volatility in global financial markets and inflation, the yield of pension assets of the UAPF, distributed to the accounts of depositors (recipients) since the beginning of 2023, amounted to 1.38%.
We emphasize that the profitability of pension assets for certain short periods of time is not an indicator of the effectiveness of their management. Pension assets are characterized by a long investment horizon and one of the main goals of their investment is to obtain real returns in the long term.
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 9.6 billion tenge.
As of 01.03.2023, pension assets held in trust by JSC "Jusan Invest" amounted to KZT 4,236.36 million.
The company's most significant investments are: Exchange Traded Funds (ETF) units - 29.6% of the portfolio, MF RK state securities - 21.78%, NBK notes - 19.63%, Repo - 17.27%. Foreign state securities account for 8.42%, funds in investment accounts - 3.25%. It should be noted that 61.66% of the portfolio is represented in tenge, 38.34% - in US dollars. As of 01.03.2023, the weighted average yield to maturity (YTM) of debt financial instruments denominated in tenge amounted to 14.96% per annum.
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 as of March 1, 2023 since the beginning of this year amounted to 55.76 million tenge. Return on pension assets: 1.25%.
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 in the trust management of JSC "Halyk Global Markets" as of March 1, 2023 amounted to KZT 2,696.39 million. The main investments in the portfolio structure are as follows: "reverse REPO" (no more than 90 calendar days) is 54.53%; equity instruments of foreign issuers (ETF units) – 12.52%; bonds of quasi-governmental organizations of the Republic of Kazakhstan - 12.21%; securities with the status of state issued by central governments of foreign states – 6.42%. Investments in national currency accounted for 80.27% of the portfolio, in US dollars – 19.73%.
As a result of investment activity, the amount of accrued investment income as of March 1, 2023 from the beginning of this year amounted to 63.12 million tenge. Return on pension assets: 2.22%.
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 in the trust management of JSC "BCC Invest" as of March 1, 2023 amounted to 1,574.30 million tenge. Among the main areas of investment are the following: government bonds of the Republic of Kazakhstan – 50.59% of the portfolio; bonds of quasi–governmental organizations of the Republic of Kazakhstan - 20.91%; shares (ETFs for indices) – 9.23%. 79.89% of the portfolio was invested in instruments in the national currency, 20.11% in US dollars.
As a result of investment activity, the amount of accrued investment income from the beginning of the current year as of March 1, 2023 amounted to 30.57 million tenge. Return on pension assets: 1.85%.
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.
Pension assets in the trust management of Centras Securities JSC as of March 1, 2023 amounted to 1037.52 million tenge.
63.08% of assets are invested in the State Securities of the Ministry of Finance of the Republic of Kazakhstan, funds in investment accounts account for 11.27%, bonds of quasi-governmental organizations - 8.05%. 79.68% of the portfolio was invested in instruments in the national currency, 20.32% in US dollars.
As a result of investment activity and changes in the market value of financial instruments, the amount of accrued investment income from the beginning of the current year as of March 1, 2023 amounted to 23.94 million tenge. Return on pension assets: 2.17%.
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.
Pension assets in the trust management of JSC "DO Halyk Finance National Bank of Kazakhstan" as of March 1, 2023 amounted to 53.9 million tenge.
Investments in the portfolio structure are as follows: "reverse REPO" (no more than 90 calendar days) is 89.67%, cash on accounts is 10.33%.
100% of the portfolio is invested in instruments in the national currency. As a result of investment activity, the amount of accrued investment income from the beginning of the current year as of March 1, 2023 amounted to 456,954.16 tenge. Return on pension assets: 1.83%.
The detailed structure of the investment portfolio of financial instruments under the management of JSC "DO Halyk Finance National Bank of Kazakhstan" 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 UIPS operating in the market.