Q2 2018 highlights of the Ukrainian asset & fund management industry

Ukrainian asset management companies (AMCs) had UAH 289 billion (EUR 9.5 billion) of total assets under management at the end of Q2 2018. This shows a 4.5%growth (in UAH terms) for the quarter, 9.1% YTD and 18.4% annually (up from 10.9% at end March 2018). Of the total AuM, 99.5% were in the Collective Investment Institutions (CII).

More specifically:

• Total assets of ‘established’ CII (formed funds which have reached compliance with the minimal asset value requirement) amounted to UAH 266 billion (EUR 8.7 billion) at end June, having grown by 1.9% in Q2 2018 (in UAH terms), after the decline of 0.9% in Q1. This was in part due to the growing number of formed funds in the ‘venture’ CII sector.
• Of the total CII NAV, more than 96% were still in the ‘venture’ CII*.
• Of all categories of publicly offered funds, only open-ended funds continued to experience growth in their total NAV in Q2 2018, while that of interval and closed-end funds declined, accompanied by the contracting number of funds in the respective categories.

Number of AMCs in Ukraine declined from 296 at end March to 291 at end June 2018, with 278 AMCs having CII under management. Meanwhile, the number of ‘established’ (formed) CII increased for the third consecutive quarter, to 1203 funds.

• The number of AMCs dealing with acting open-ended funds remained 10, and the number of such funds also stayed unchangedat 17.

Number of investorsin all CII,has grown by 0.1% in Q2 2018. There were 466 non-resident investors (mainly institutional/corporate ones) in all funds(up from 440 at end March) who still comprised 0.2% of all the CII investors, holding 24.8% of their total NAV.

In open-ended CII:

• Total NAV has risen to UAH 84 million in Q2 2018, i. e. by 1.2% over the quarter (12% YTD and 31% annually).
• Quarterlynet sales continued accelerating to UAH 2.8 M in Q2 2018, as well as did the annual net inflow, which amounted to UAH 7.6 M as at end June (up from UAH 5.7 M inMarch), and so 38% of the annual NAV growth in the sector.
• Domestic retail investors had more than 77% in these funds’ NAV and still comprised more than 98% of all the investors in the sector as at end Q2 2018.
• There were aslo 8foreign investors (non-residentinstitutional/corporate and individual ones – down from 10 as at end March 2018) in these funds who comprised just 0.5% of all their investors but were holding 13.3% of their total NAV.

Non-state Pension Funds’  assetsunder management of AMCs (III-pillar NPFs,excluding the National Bank’s corporate pension fund) grew to UAH 1,265 M asat end June 2018, speeding up quarterly growth to 3.9%in Q2 2018 (and to 13.7% annually, up from 10.9% in March)***.

• There were 35 AMCs managing pension assets of 58 NPFsasat end June 2018, out of which 79% were NPFs of the open type.

Insurance firms’assets under management of AMCs grew by 1.0% in Q2 2018 to stand at UAH 108 million as at end June 2018, which was a slight recovery after the 13.8% contraction in the Q1. The annual dynamics remained positive, with 29.1% growth rate.

• The number of Ifs whos assets were managed by AMCs contracted from 6 in March to 4 in June 2018, while there were still 2 AMCs providing such a service to Ifs at the time.

* Venture CIIs are closed-end ‘non-diversified’ funds with private issue only, mainly investing in private equity and debt, with the lowest restrictions on their activity as compared to other fund categories.

** See fund classification at the UAIB website: http://www.uaib.com.ua/eng/abcpeople/cii_manual.html as well as CII Ranking (Collective Investment Institutions (CII) - by fund class):  http://www.uaib.com.ua/eng/analituaib/rankings/ici.html

*** The National Bank’s corporate NPF, which is managed by the NBU itself, had probably still roughly 50% of the total NPFs’ AuM, but, at the time of preperation of this note, there is no respective data available from the National Financial Services Commission as at end June 2018.

See more at the UAIB website:

• Q2 2018 report – General figures (in Ukrainian)
• Q2 2018 report – Collective Investment Institutions (CII) (in Ukrainian)
• The Ukrainian Fund Market in Figures

The Q2 2018 report in English to be published soon.

For enquiries, please contact Anastasiia Gavryliuk, Director of International Relations - Senior Analystat gavrylyuk@uaib.com.ua.