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UAPF explains profitability fluctuations

Due to the national currency depreciation, the return on investment of pension savings amounted to 541.9 billion tenge in March. In the first half of April, the tenge strengthened and UAPF currency portfolio showed a negative income of 179.7 billion tenge. This was told by the Unified Accumulative Pension Fund executive during an online briefing.
UAPF explains profitability fluctuations

The return on investment of pension savings depends on two main factors: the market value of securities and tenge exchange rate. Most of the UAPF funds are invested in instruments denominated in tenge (2/3 of the total UAPF portfolio), the rest are in shares and bonds in foreign currency (1/3 of the portfolio).

“In March, the dollar appreciation from 381 to 448 tenge per one US dollar took place. This ensured the growth of pension assets by 541.9 billion tenge. In the first half of April, on the contrary, the national currency strengthened from 448 tenge to 425 tenge per dollar, which led to a negative currency revaluation of pension assets in the amount of 179.7 billion tenge. In the second half of April, however, the net return on investment grew again by 63.4 billion tenge,” the UAPF Board Chairman Zhanat Kurmanov tracked the chronology of events.

Thus, from the year beginning to April 27, return on investment has amounted to 587.16 billion tenge.

The UAPF executive reminds that in international practice it is customary to evaluate the return of pension savings for at least a year, since these assets are invested for a long-term period, which is why financial experts call them “long money”.

“Depositors should not worry about fluctuations in return on investment in March and April. Over the past 12 months the return on savings has been 11.87% with inflation 6.4%. Thus, the return exceeded inflation by 5.5%, and this is net income,” the UAPF executive specified.

As of September 2013 (when the Kazakhstani pension savings came under the UAPF control), the return on investment exceeded 30%.

“As a trustee of UAPF pension assets, the National Bank of Kazakhstan places them in various financial instruments of diverse economic sectors, in different currencies locally and abroad. This ensures the safety and sustainable profitability of pension savings,” summarizes the UAPF Board Chairman.

As reported earlier, the part of Kazakhstani people’s savings was transferred under external management. The National Bank is currently working with several global companies. They manage over $1.6 trillion in total. In addition, the National Bank has selected six more foreign management companies, the negotiations on signing the investment agreements are in process.

Source: https://kursiv.kz/news/pensionnaya-sistema/2020-04/raznonapravlennoe-dvizhenie-tenge-menyaet-investdokhodnost

Photos are from open sources.

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