UAIB: Performance of the Collective Investment Institutions in Q1 2014
22 May 2014
In Q1 2014 collective investment institutions in Ukraine, mainly continued to show an upward dynamics, however, some changes of opposite nature also took place.
The key trends of the Ukrainian CII market in Q1 2014 were as follows: reduction in the AMC number – both registered and those that reached compliance with the minimal asset volume standard; simultaneous increase in number of venture unit CII, that, as well as before, provided the lion's share of growth of assets under management; strengthening of capital outflow from open – ended CII at the unchanging amount of operating funds; preemptive further reducing a share of securities in CII portfolios, except interval funds, however in absolute measurement - growth of cumulative funds’ investments in fund instruments, in particular, corporate bonds; further enhance in rates of return in most sectors of CII by the types and classes of funds.
The number of AMC in January-March 2014, according to the UAIB data, decreased to 343 companies, although 5 new AMC were created during the quarter.
The number of registered CII for the first time became less - 1597 (after 1604 in Q4 2013), the number of CII, that reached compliance with the minimal asset volume standard also decreased (-7, after + 11) – up to 1243. This was due to the dynamics of closed-end CII, including venture capital, CIF (-5), while the number of venture capital UIF, traditionally, has increased (+ 4). The numbers of existing open-ended and interval CII did not changed.
As of 31.03.2014, in the state of liquidation there were 5 open-ended, 4 interval, 19 closed-end non-diversified and 24 venture CII.
The assets of CII in Q1 grew, mainly again due to venture capital funds, but this time assets increased not only in other closed-end CII but also in interval funds. Aggregate CII assets increased for the quarter by UAH 9 594 mln. (+ 5.4%) up to UAH 187 117 mln., those of venture funds by UAH - 8 576 mln. (+ 5.1%) up to UAH 176 759 mln.
NAV also went on growing in all sectors, except the open-ended ones. Aggregate net assets increased by UAH 7 627 mln. (+ 4.8%) to UAH 166 051mln, at that in venture funds - by UAH 6 840 mln. (+ 4.6%) up to UAH 156 720 mln.
The capital outflow from open-ended CII during the first three months of the year increased and amounted to UAH 14 mln. (after – UAH 12 mln. in October-December 2013). Again investors of several funds were the motor of capital’s movement. The number of funds with a net inflow of capital remained insignificant – from 2 up to 4 monthly, while their aggregate additional revenue increased three times, but remained insignificant – UAH 0.45 mln.
Investors of CII in Q1 demonstrated generally the same behavior as in the previous three months – Ukrainian investors expanded their presence, mainly in venture capital CII, and non-residents made the withdrawal of money from them. Moreover, if the above mentioned growth increased at almost a quarter due to national institutional investors and nearly a third due to the citizens, then the withdrawal of investments by foreign investors slowed down twice.
In general, as of 31.03.2014, institutional investors from Ukraine had the main share in CII, which declined for the quarter from 78.3% to 77.5%, and natural persons - residents, due to the relatively biggest growth of investments, increased their share in the NAV of all CII – from 5.1% to 6.2%.
The asset structure in Q1 2014 continued to experience reducing in securities’ share of investments in most sectors of CII (except interval ones). It varied in aggregate portfolio of assets from 28.2% of venture capital funds and 41.0% of open-ended ones to 72.8% of interval funds.
In contrast to that and to Q4 2013, investments of funds in fund instruments at this time significantly increased - by 1 653.18 mln., in particular, this was related to equities (UAH 903.66 mln.) and corporate bonds ( UAH 842.59 mln.). And value of CII increased mostly in "other" assets – at the expense of venture CII (+ UAH 7 687.39 mln.). The share of these assets (in particular, corporate rights, expressed in other than securities, forms, and also loans to companies in which CII have a share of capital) in the aggregate portfolio of venture capital funds continued to grow – from 66.6% to 67.7%.
The rates of return of CII over the quarter again increased. It was due to a sharp rise in the stock indexes, which influence was limited, at least, by the concentrated in equities part of CII assets – from 25% in open-ended funds up to 64% in interval ones.
The number of CII that demonstrated an increase in the value of their securities, went up to 25 from 31 among the open-ended funds, up to 17 out of 28 among interval ones, and decreased to 51 from 110 among closed-end non-venture funds.
An average rate of return in the sector of open-ended funds made up + 7.1% with the range of results of separate funds between -3.0% and + 22.4%. Interval funds showed an average of + 1.6% (between -8.6% and +11.1%). Closed-end CII generated + 4.3% (between -23.3% and + 92.9%).
Among diversified publicly placed CII in Q1 2014 bond funds were again among the leaders (+ 18.8%), and equity funds came to the second position after a disastrous previous quarter (+ 6.8%). “Other” funds insignificantly lagged behind (+5.7%), and mixed funds brought an average of + 2.7%. Money market funds, according to criteria of the actual structure of assets, weren't the third time in a row.
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For enquiries please contact: Anastasiia Gavryliuk (Senior analyst & International Relations Coordinator) – gavrylyuk@uaib.com.ua.