UAIB: Performance of the Collective Investment Institutions in Q1 2012

Unlike in the last quarter of 2011 року, the situation in the stock market and in the collective investment area in in Q1 2012 was developing differently than in the majority of well-developed European markets, where trend broke to growth.

 

Among the key trends of Q1 2012 in the collective investments industry in Ukraine could be mentioned a preservation of mainly pessimistic moods and downtrends in the market of public investments, as national equity indexes were searching for bottom, and, contrary to that, a stable growth of the market of venture funds.

 

The number of AMC grew during the quarter for the first time since 2008. The number of registered CII also continued to increase, recognized funds (those that reached compliance with the normative on the minimal asset volume), mainly venture ones, were again entering the market. Simultaneously, the sectors of open-ended and interval funds have narrowed, and there are grounds for this trend to continue in several subsequent quarters.

 

The assets and NAV of CII again grew, but at a slower pace (+3.5% and 1.4% compared to +6.7% and 8.1% in the preceding quarter). This time other closed-end funds joined the traditionally growing venture segment, having outperformed the latter by NAV growth rate. Finally, as of 31.03.2012, an aggregate value of all CII assets reached UAH 131 159M, and of the net assets – UAH 114 301M, 91.8% of which belonged to venture ones.

 

An outflow of capital from open-ended funds in Q1 continued, but slowed down almost 1.5 times to UAH 26M. It therefore remained the key driver behind the sector’s NAV decrease, which dropped by UAH 21M (-9.1%). The leading role of one fund in the aggregate capital movement of this type of CII also remained unchanged.

 

Among CII investor categories in Q1 2012 those were residents that continued to prevail, in particular, legal entities, and in open-ended funds – natural persons that have lost the leadership in interval funds. Compared to Q4 2011, an important change was a decrease of the investments of Ukrainian citizens into all categories of funds, and of national companies – into open-ended funds.

 

Despite a major outflow of investments from open-ended and interval funds accompanied by sinking of equity indexes, the equities’ share within the structure of theaggregate portfolios of these types of CII increased, just as in the preceding quarter. That occurred owing to a more massive decrease of these funds’ assets in the form of moneys, and in open-ended CII – also in the form of corporate and government bonds. At that, interval and closed-end (including venture) funds grew investments into debt securities, and “other assets” (mainly corporate rights and loans) remained the key object of venture CII investments.

As public bond funds were getting extremely popular in Europe in the conditions of careful investment behavior of investors, Ukrainian funds were notably growing assets in the form of debt securities. In the meanwhile, than was true of all CII sectors, with exception of open-ended ones.

 

The rate of return of funds in Q1 2012 on the whole grew, even under conditions of the negative stock market dynamics. The only exception was the sector of closed-end funds where an average value of securities dropped.

All in all, open-ended CII were most successful with +0.8% of an average rate of return, and an increase in the number of funds with upward dynamics from 27.5% to 72.5%. Interval and closed-end CII generated -1.0% and -4.1% on average, and positive indicators were generated by almost 60% of interval and over 36% of closed-end funds.