UAIB: Performance of the Collective Investment Institutions in Q1 2016
The first three months of 2016 were another challenging period for global stock markets, and international industry of investment funds suffered some losses during this period. But in Ukraine, dynamics of collective investment institutions’ industry continued to be determined mainly by domestic factors. Growth, in general, continued, but much less actively, than in the previous quarter and a year ago.
Key trends of Ukrainian industry of collective investments in the first quarter of 2016 changed virtually and were as follows:
The number of AMC, according to UAIB, decreased from 313 to 309, at the same time one new company was established in Kyiv during the quarter.
The number of registered CII (total) increased to 1572 as at 31.03.2016, and funds which reached the complience with the standard of minimum amount of assets - dropped to 1141. This was again connected primarily with the dynamics of venture UIF (-11).
Assets of CII, that reached the standards, increased for the quarter by UAH 1,412 mln. (+0.6%) and, as at 31.03.2016, amounted to UAH 238,137 mln., including venture capital funds – UAH 227,616 mln. Venture capital funds were again the only one engine of growth, increase of their assets offset reductions of other sectors (+UAH 2,076 mln., +0.9%).
NAV slowed its growth as well, although to a lesser extent than total assets: aggregate net assets of all funds increased by UAH 2,857 mln. (+1.4%) to UAH 202,718 mln., at that of venture CII – by UAH 3,250 mln. (+1.7%) to UAH 193,158 mln.
The outflow of capital from open-ended CII, that was observed each month during January - March, accelerated compared to the previous quarter, but slowed in annual terms - up to –UAH 0.93 mln. for the quarter and –UAH 3.67 mln. in a year.
Investors of CII became less in sectors of open-ended and venture capital funds (by 911, 34.3%, and by 117, 2.3%, respectively), while in interval and closed-end non-venture funds their number increased slightly. In general, in CII, as at 31.03.2016, there were 261,817 investors, more than 95% of which - in interval funds, almost 2% - in venture and other closed-end CII.
Ukrainian corporate investors (legal entities-residents) remained the largest investors of CII, all together they owned 74.2% of NAV of all CII. In open-ended funds assets of retail investors-citizens of Ukraine dominated (73.5%). During the quarter domestic enterprises increased their presence in CII by UAH 1,160 mln., individuals – by UAH 1,584 mln., and foreign investors - reduced it by UAH 1,460 mln.
Structure of assets in the 1-st quarter of 2016 showed a further increase in the total value and weight of securities in open-ended and closed-end CII (this time in venture ones also) and reduction of them - in interval funds. The main factor behind this were funds’ investments in government securities. There was remarkable increase in the amount and share of equities in assets of venture CII (UAH 1,678 mln., up to more than 11%).
In total, as at 31.03.2016, in the structure of CII’ assets financial instruments amounted from nearly 21% in venture and 35% in other closed-end CII to 68% and 70% in open-ended and interval CII, respectively.
CII’ rates of return mainly decreased for the quarter - due to the failure of the stock market at this time. Closed-end CII with public emission demonstrated the highest average yield for the quarter among all CII by types of funds (+1.1%), and open-ended CII moved into positive zone (+0.4%).
Finally, bond funds were leaders by quarterly and annual rates of return both among diversified CII with public emission by classes of funds, as well as among all sectors of CII (+5.0% in Q1 2016 and +15.9% for the year). Mainly open-ended CII were referred to such funds.
For the full report, please see attachments below.