June 2023 Monthly Report

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

At the end of January 2023, mandatory pension funds (MPFs) had 2,203,918 members, i.e. 4,940 (0.22%) members more than in the previous month. Category B funds had 83.6% of all MPF members, while category A and category C funds had 12.8% and 4.4% of all MPF members respectively. Out of 6,463 new members, 6,347 (98.2%) were automatically allocated by Regos. Termination of membership due to retirement or death was recorded with respect to 1,523 insured persons. Total net contributions paid to MPFs in June amounted to EUR 103.5m (0.6% of net assets at the end of May). At the same time, total payments from all MPFs due to personal account closures reached EUR 30.9m (0.2% of net assets at the end of May), increasing by EUR 1.7m compared to the previous month.

At the end of June 2023, MPFs’ net assets amounted to EUR 18.9bn, rising by EUR 333.0m (1.8%) relative to the previous month. The net assets of all MPFs rose by EUR 1.4bn (7.6%) relative to the beginning of the year, with semi-annual rise in net assets by category reaching EUR 70.9m (27.7%) for category A MPF, EUR 1.0bn (6.6%) for category B MPF and EUR 230.9m (16.1%) for category C. The decline in the value of mandatory pension funds’ net assets recorded in the previous year was thus completely compensated for by this rise.

At the end of June, nominal monthly Mirex returns reached 2.1% for category A, 1.5% for category B and 0.2% for category C. Annual Mirex returns reached 9.6% for category A, 5.1% for category B and 0.6% for category C, while annualised^[1] returns since the beginning of MPFs’ operation stood at 6.9% for Mirex A, 5.1% for Mirex B and 3.2% for Mirex C^[2]. Since the beginning of 2023, semi-annual returns amounted to 8.4%, 5.2% and 1.1% for category A, B and C respectively.

At the end of June, bond investments of MPFs totalled EUR 11.8bn (62.3% of total assets), making their share decrease by 0.2 p.p. on a monthly basis. The share of equity investments in MPFs’ assets increased by 0.4 p.p. on a monthly basis, amounting to 21.8% of MPFs’ assets (EUR 4.1bn). Investments in domestic shares accounted for 13.0%, while investments in foreign shares accounted for 8.8% of MPFs’ assets. Investments in investment funds amounted to EUR 2.1bn (11.4% of the assets), making the proportion of these investments in total assets rise by 0.3 p.p. relative to the previous month. Investments in cash and deposits amounted to 2.3% of the assets, or EUR 429.5m.

THIRD PILLAR PENSION FUNDS

At the end of June 2023, the number of members of 8 open-ended voluntary pension funds (OVPFs) rose by 0.5% on a monthly basis, while the number of members of 21 closed-ended voluntary pension funds (CVPFs) increased by 0.3%, making the number of members of these funds reach 382,965 and 47,818 respectively. Total monthly payments made to voluntary pension funds (VPFs) in June 2023 amounted to EUR 8.5m (0.8% of their net assets at end-May), rising by EUR 0.4m compared to the previous month. Total payments made from these funds reached EUR 3.4m, decreasing by EUR 0.4m (9.5%) compared to total payments made from VPFs in the previous month. Total payments from VPFs made due to retirement and other reasons accounted for 72.9%, payments made due to the change of fund reached 20.8%, while those made due to death accounted for 6.3% of total payments in June. With respect to payments made due to retirement, the amount of EUR 1.1m was paid through a pension company (fund), the amount of EUR 0.7m was paid in the form of lump-sum payments, while the amount of EUR 0.6m was transferred for payment to pension insurance companies.

In June 2023, VPFs’ net assets rose by EUR 23.2m (2.1% on a monthly basis) and stood at EUR 1.13bn. Since the beginning of the year, VPFs’ net assets grew by EUR 193.4m or 14.0%.

Monthly nominal returns of VPFs ranged from -1.2% to 2.5%, while returns on an annual basis ranged from -10.0% to 9.4%. VPFs’ semi-annual return since the beginning of the year ranged between -10.0% and 7.6%.

As regards the investment structure of VPFs, the largest part of the portfolio was made up of bonds and amounted to a 55.5% share in total net assets, followed by stocks with a 25.8% share and investment funds with an 11.9% share. The share of bonds in VPFs’ investments increased on a monthly basis by 1.1 p.p., the equity share rose by 0.5 p.p., while the share of investments in investment funds declined by 0.6 p.p.

CAPITAL MARKET

The total turnover on the Zagreb Stock Exchange reached EUR 25.0m in June 2023, increasing by 32.7% on a monthly basis. The total turnover since the beginning of the year amounts to EUR 137.1m. Market capitalisation increased by 1.1% relative to the previous month and stood at EUR 38.5bn, of which stocks amounted to EUR 20.5bn, bonds to EUR 17.9bn and ETFs to 14m. Since the beginning of the year, market capitalisation rose by EUR 4.1bn (11.9%).

As for stock indices, the largest monthly rise was recorded by CROBEXindustrija (9.2%), while CROBEXtransport recorded the smallest monthly growth (2.7%). The main stock index of the Zagreb Stock Exchange (CROBEX) recorded a monthly rise reaching 5.1%, while CROBEX10 grew by 5.5%. The main bond index CROBIS declined by 0.3%, and CROBIStr fell by 0.04%.

Since the beginning of 2023, the main stock indices CROBEX and CROBEX10 recorded a semi-annual growth reaching 18.6%, while the bond indices CROBIS and CROBIStr recorded a semi-annual decline totalling 2.2% and 0.9% respectively.

Podravka d.d. was the stock most traded in June, with its turnover amounting to EUR 2.6m (13.8% of the overall trade in stocks in June) and a 15.2% monthly price increase. SPAN d.d. was the stock mostly traded in the first half of 2023, with its total turnover reaching EUR 15.0m

INVESTMENT FUNDS

In June 2023, there were 106 UCITS operating on the market, one more than in the previous month. Total net assets of UCITS amounted to EUR 2.0bn at the end of the month, increasing by EUR 28.4m or 1.4% compared to the previous month. Total monthly net payments of all UCITS were positive for the third consecutive month and reached EUR 15.3m. Negative monthly net payments were recorded by bond funds (EUR -4.6m), balanced funds (EUR -1.8m) and feeder funds (EUR -0.9m). Positive monthly net payments were recorded by equity (EUR 11.1m) and funds categorised as “other funds” (EUR 11.6m).

Since the beginning of the year, UCITS’ net assets decreased by EUR 137.6m (-6.4%), given that total net payments recorded by all UCITS in the first six months of the year were in the red, totalling EUR -140.8m. This was mostly due to negative net payments recorded by bond funds (EUR -271.5m), balanced funds (EUR -17.3m) and feeder funds (EUR -8.0m). Positive semi-annual net payments were recorded by funds belonging to the “other” category (EUR 132.8m) and equity funds (EUR 23.2m).

Bond funds’ net assets accounted for 42.2% of the total net assets of all UCITS at the end of June, while equity and balanced funds accounted for 16.0% and 13.9% of the total UCITS’ net assets respectively.

In June 2023, positive asset-weighted average monthly returns were generated by all UCITS, namely equity (3.4%), balanced (1.2%), feeder (0.5%), other (0.2%) and bond UCITS (0.03%). Semi-annual asset-weighted average returns were also positive for all UCITS, with the highest return having been recorded by equity funds (14.7%), followed by balanced (4.3%), feeder (3.6%), other (2.7%) and bond (0.3%) funds.

Net assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to EUR 140.4m (a 1.3% monthly increase), with the monthly return of the fund reaching 1.4%.

The full report is available at Publications/Monthly reports