UIF market exceeds four trillion rubles in 2019: five-year high net funds inflow
The net asset value of unit investment funds (NAV UIF) increased in 2019 by 32.4% (1.1 trillion rubles), to 4.48 trillion rubles. This is the highest net inflow of funds to UIFs over the past five years. Record high during the same period was also the quarterly net inflow to funds for non-qualified investors, at 62.7 billion rubles in Q4, double the result of 2019 Q3. This is evidenced by the data shown in the information and analytical commentary ‘UIF Market Trends’.
Investments in UIFs for non-qualified investors in 2019 totalled 0.9 trillion rubles (10.5% QoQ growth in Q4). Retail investors have increased investments in open-end and exchange funds, investment units of which can be purchased and redeemed on any day. The portfolios of open-end and exchange UIFs grew over the quarter by 21.7% (to 454.7 billion rubles) and 51.6% (to 16.9 billion rubles) respectively. The increase in the NAV of UIFs comes against a background of falling deposit rates. At the same time, closed-end and interval UIFs for non-qualified investors have seen an outflow of funds (to 422.6 and 6.6 billion rubles respectively).
Assets in the real sector of the economy account for more than half (61%) of the investments of UIFs for non-qualified investors. Nearly a third of the assets (31%, or 285.7 billion rubles) of such funds are invested in construction, real estate, development and infrastructure; however, the share of these investments decreased throughout the year (by 3.2 pp over the quarter and by 6.7 pp over the year). In Q4, the share of investments in financial organisations contracted (to 17.5%, or 161.4 billion rubles), but a rise was seen in investments in banks (to 12.5%, or 115.3 billion rubles) and oil and gas companies (to 11.1%, or 102.4 billion rubles). The resources of UIFs for non-qualified investors are usually invested in corporate bonds (30.5% as of year-end), shares and depository notes (24.1%), and real estate (23.1%).
The resources of UIFs for qualified investors increased in Q4 by 13.8%, to 3.58 trillion rubles, of which closed-end funds account for 98.8% (3.53 trillion rubles). The funds of such UIFs usually consist of investments in the financial sector (55.8%, the share increased by 3.5 pp over the quarter). The portfolios of such funds continue to increase the share of assets of financial companies (+3.2 pp over the quarter, to 46.3%) amid contracting investments in construction, real estate, development and infrastructure (-3.7 pp, to 25.6%).
As of year-end, there were 1,531 UIFs registered in the market, of which 525 were UIFs for non-qualified investors and 1,006 were UIFs for qualified investors. A year earlier, there were 1,440 funds in the market (554 and 886 respectively). In 2019 Q4, 74 new funds were registered in the market.