UAIB: Performance of the Collective Investment Institutions in Q4 2011
On the whole, 2011 was not a favorable year for investments into public investment funds, as their rates of return closely correlate with stock market dynamics. In Ukraine, just as in neighboring countries, as well as well-developed markets, this year passed in downtrend. The year was full of events of global impact that were giving important signals to the stock markets of certain countries, as well as affected international economic relations, and were mostly of negative nature.
The changes below could be regarded as the key trends of Q4 and year 2011 in the market of collective investment institutions in Ukraine.
As the number of AMC, as well as of operating and recognized CII of interval and close-end types in Q4 decreased, the industry’s assets and NAV continued to grow (+7%), though solely owning to the venture segment. As of 31.12.2011, the total net assets reached UAH 112 691 mln, 92% of which belonged to venture CII.
In 2011, net assets increased in close-end funds of both sectors, in particular, the venture sector growth by 19.9% ensured the annual growth of an entire market by almost 19% (+UAH 17 950 mln).
Capital outflow of UAH 37 mln from open-ended CII in Q4 resulted in annual losses in amount UAH 24.5 mln. On the whole, investor contributions and withdrawals of moneys from funds in 2011, just as in 2010, determined the dynamics of the net assets of the open-end CII sector. At that, as before, these movements were due to individual funds, the scale of capital movements in which most affected an overall result.
Due to an outflow from open-ended and interval funds in Q4, within the structure of the aggregate portfolios of these CII types a major decrease of the share of moneys on bank accounts and, as a result, a notable increase of the share of equities took place, which was contrary to the stock market tendencies. In close-end funds the share of equities narrowed, and in venture funds, in particular, broadening of the share of investments into “other assets” occurred.
As for the investments into CII of different investor categories, in Q4 an increase of the contributions of Ukrainian legal entities into open-end funds, and natural persons – into venture ones should be noted.
Funds’ rates of return in Q4 significantly increased compared to those of Q3, which resulted from the exchange market indexes’ trend leveling-off. Open-end funds earned between -11% and +8%, at that, 11 of them provided for investment value increase; interval funds demonstrated between -13% and +11%, with 13 funds generating positive performance results, and close-end funds – between -75% to +98% (59 above zero).
Therefore, in 2011 in Ukraine, just as in the whole world, public CII, particularly those with aggressive investment strategies, incurred significant losses and were getting unpopular with investors. At the same time, some funds with moderate and conservative strategies were more efficient in preserving their contributors’ investments’ value during that period, and some even managed to ensure this value growth.