Ukrainian fund & asset management industry highlights of Q2 2024: First increase in the number of asset managers since 2021, continued expansion of the AuM, large inflow into open-ended funds

Under the continued martial law due to the full-scale russian aggression against and invasion into Ukraine which lasted for 28 months by end June 2024 and despite the tightening of the capital markets regulation and supervision, the Ukrainian fund & asset management industry kept showing overall resilience with the number of management companies starting to grow and the acceleration of the creation of new funds in the corporate form. Additionally, in Q2 2024, open-ended funds saw almost historic net sales.

AuM of the ‘established’ Ukrainian Collective Investment Institutions (CIIs) rose by 0.8% (in UAH terms) in Q2 2024 to reach UAH 619.1 billion by end June 2024 (EUR 14.3 billion down from EUR 14.5 billion in March due to the UAH devaluation). The annual growth rate in June 2024 decelerated to +8.2%.

More specifically:

• ‘Venture’ CIIs in the corporate form (VCIFs) continued to play the key part in the industry’s growth in terms of the number of funds: +26 such funds out of 32 new CIIs in total over the quarter; the share of the VCIFs in the total CII number almost reached 59% (for all venture CIIs close to 94%);
• AuM of the formed venture CIIs grew by 0.6% in Q2 2024 and by 8.0% annually in June 2024;
• NAV added 2.5% over the quarter and 14.4% annually to reach UAH 502.9 billion with its share in the total Ukrainian CIIs’ NAV remaining above 96%.

Among the publicly offered funds, namely the open-ended, interval, and closed-end CIIs with public offering, the first and the latter of the sectors had their total NAV increase in Q2 2024 while interval funds experienced a small decline; annually all three sectors grew their NAV with open-ended funds leading.

Number of the formed CIIs increased for the third consecutive quarter to 1795 funds by the end of June 2024 (+8 funds or 0.4% in Q2). During the quarter, 33 new funds were created.

In open-ended CIIs (all publicly offered):

• Total NAV amounted to UAH 218 million as at end June 2024;
• Grew by 42.2% in Q2 2024 and 50.6% annually in June, up from 7.4% in March;
• The NAV growth was thanks to both capital inflow and positive revaluation of the funds’ portfolios.

Net sales turned positive in Q2 2024 for the first time in three quarters and were the largest since Q1 2021: UAH 57.6 million (after -UAH 2.7 million in the previous quarter); Annual capital flow also turned positive by end June 2024 and amounted to UAH 51.3 million, up from -UAH 8.8 million in March.

Investors

• Domestic retail investors increased their relative holdings in the open-ended funds to 89.7% of the total NAV in June 2024, up from 85.7% in March. They still comprised above 98% of all investors in the sector;
• There were still 5 foreign investors (non-resident institutional/corporate and individual ones) in open-ended funds at end June 2024, having 4.5% in the sector’s total NAV, down from 6.2% in March – due to the massive net sales to domestic retail investors in Q2;
• Number of non-resident investors in all CIIs in total decreased from 392 in March to 370 in June 2024 – mainly due to their exit from venture CIIs. Still, non-residents held 21.6% of the CIIs' total NAV by the end of Q2.

Number of AMCs in Ukraine grew from 278 in March to 279 in June 2024. Out of those, 249 (89% down from 90% in Q1) remained active and reported on their investment and/or pension funds under management for the quarter in particular:

• Almost 99% of them had at least one venture CII under management;
• Nine AMCs still managed 16 open-ended funds, and 28 companies had 73 publicly offered CIIs in total;
• Furthermore, 30 AMCs had 51 pension funds under management and one managed assets of one insurance company as before.

Non-state pension funds (NPFs) had UAH 3064 million of assets under management of AMCs by end June 2024, accelerating to +5.4% quarterly in Q2 and to +24.9% annually (up from +19.1% in March); while NPFs assets under administration of the ANPFs rose to UAH 3065 million by end June 2024 – also +5.4% in Q2 2024 +20.1% annually (up from +19.2% a quarter ago).

Insurance Companies’ assets under management of AMCs accelerated to +8.2% quarterly in Q2 2024, although slowed down to +37.4% annually in June (up from +44.7% in March). They amounted to UAH 232 million as at end June 2024.

First part of the full UAIB Q2 2024 report is available on the UAIB website (in Ukrainian) at the link: UAIB Q2 2024 report

See more market statistics on the UAIB website: The Ukrainian Fund Market in Figures

For enquiries please contact Anastasiia Gavryliuk, Director of International Relations & Senior Analyst at gavrylyuk@uaib.com.ua

Footnotes

1. Formed funds which have reached compliance with the minimal asset value regulatory requirement.
2. Venture CIIs are closed-end ‘non-diversified’ funds with private placement only mainly investing in private equity and debt with the lowest restrictions on their activity as compared to other fund categories.
3. See fund classification on the UAIB website: UAIB fund classification.
4. These were 52 III-pillar funds excluding the NBU’s corporate pension fund. The National Bank’s of Ukraine corporate NPF which is managed by the NBU itself had around 42% of the total NPFs’ AuM.