UAIB: Performance of the Collective Investment Institutions in Q3 2013
In July - September 2013 the industry of collective investment institutions demonstrated continuation of the majority of the preceding quarter key trends. 0
The key trends of the Ukrainian CII market in Q3 2013: further growth of the venture sector assets, in particular, owing to new funds; 200% greater capital outflow from open-ended CII – mainly due to domestic retail investors; narrowing of the share of securities in non-venture funds’ portfolios; unlike in Q2 – increase in the number of AMC, and growth of the CII rates of return by all types and classes of funds.
The number of AMC in Q3 increased by two owing to Kyiv region. As of 30.09.2013, according to UAIB data, there were 347 asset management companies in operation.
There were 1593 registered CII (after 1580 in Q2), and the number of CII that reached compliance with the minimal asset volume standard resumed growth (+35 funds) – there were 1239 of them. That occurred owing to an increase of the number of venture CII (+36), as well as of closed-end non-diversified PIF (+2). The number of open-ended CII did not change, though as of 30.09.2013 already seven such funds had started liquidation process (in Q3 – 6 funds).
The assets of CII once again grew solely due to venture funds: the aggregate ones – by UAH 7 808 mln. (+4.76%) to UAH 171 861 mln., and those of venture CII – by UAH 8 115 mln. (+5.25%) to UAH 162 657 mln. Finally, the sector of venture CII expanded its market share in terms of assets from 94.2% to 94.7%.
The NAV of CII went on growing – this quarter owing to venture, as well as other closed-end funds. Aggregate net assets increased by UAH 8 072 mln. (+5.54%), up to UAH 153 661 mln., at that, those of venture CII – by UAH 8 078 mln. (+5.89%), to UAH 145 234 mln. Since the beginning of 2013 the NAV of CII has grown by UAH 14 400 mln. (10.34%), in particular, the one of venture funds – by UAH 15 736 mln. (12.15%).
The capital outflow from open-ended CII in Q3 turned out to be the greatest one since Q1 2012 and exceeded UAH 23 mln., at that, in August net outflow reached UAH 15.62 mln. making it the maximum of the last 21 months. The main role here was once again played by two funds. The number of open-ended CII with net capital inflow dropped to 2-3 per month, and their aggregate volume of investments attracted was extremely small – UAH 0.2 mln. over the quarter (after UAH 1.26 mln. in Q2 and UAH 7.42 mln. in Q1). The outflow since year beginning comprised UAH 36 mln., and the annual one – UAH 46 mln., which is 1,5 times more than in the preceding quarter.
The investors of CII in July-September continued investing primarily into venture CII, as well as into other closed-end funds. In the venture sector the main share was held by national institutional investors (decrease from 79.5% to 77.6%). Their share also decreased in the aggregate NAV of CII industry – from 78.5% to 76.8%. In the meantime, relatively faster growing investments of companies - non-residents and Ukrainian citizens into the venture sector broadened their respective shares within the net CII assets. In such way, foreign institutions held already 19.5% in venture funds and 18.8% in CII on the whole (after 17.9%/17.4% in Q2 respectively), and national retail investors – 2.9% in venture and 4.6% in all CII (after 2.6%/4.1% accordingly). It is in open-ended funds that natural persons – residents narrowed their presence most, which resulted in their share for the first time appearing smaller than the one of legal entities (45.4% versus 8.9%).
The asset structure in Q3 2013 was affected by further cutting of the volumes of investments and the share of securities in all CII sectors, with exception of venture ones (to 47.7% in open-ended, 51.3% in closed-end, and 74.5% in interval funds). In venture CII the share of stock market instruments broadened up to 31.2%.
Among the most notable changes should be mentioned a decrease of assets in corporate and municipal bonds and their share within the portfolio structure of all non-venture CII sectors, with a simultaneous increase of the shares in equities, OVDP, moneys and “other” assets in all sectors as well. However, open-ended and interval CII cut their investments into government securities, as well as moneys on bank deposits; all non-venture sectors decreased assets in equities, and open-ended and closed-end funds – in “other” assets as well as. Venture CII, even having grown their investments into “other assets”, increased them relatively less than equities, promissory notes and corporate bonds, as a result, the respective share of these assets within their aggregate portfolio narrowed to 63.9%.
The rates of return of CII over the quarter somewhat increased, despite further downward movement of stock indexes. The number of CII that demonstrated an increase of their securities’ value in the sector of open-ended funds went up to 19 out of 34 funds. An average sector rate of return grew to +0.2%, with the range generated by different CII being between -14% and +9%. Interval funds demonstrated between -8% and +39%, with an average rate of return of +1.6%, closed-end CII generated between -49.4% and +54.9% with an average rate of return of +1.0%. Since year beginning open-ended funds demonstrated -1.8%, interval – +6.5%, and closed-end – +0.3% on average.
Among diversified publicly placed CII in Q3 most successful performance was demonstrated by equity funds (+5.4%), with the leader’s result being +39.1%. Hybrid funds demonstrated +1.9% (with the leader’s result of – +14.6%), “other” funds – +0.3% (the leader – +9.3%). There were no money market funds and bond funds in Q3, as diversified publicly placed CII do not meet the criteria set forth for these classes of funds. Since year beginning equity funds generated +6.0%, hybrid funds – -1.4%, and “other” funds – -1.3% on average.