Returns on pension resources invested by NPFs grow
Over the first 9 months of 2019, non-governmental pension funds (NPF) significantly increased their returns on invested pension resources as compared to the same period last year. These data are published in the Review of Key Indicators of Non-governmental Pension Funds. Weighted average returns (before fees to management companies, the special depository and the fund) grew by 8.3 pp to 10.1% p.a. on pension savings and by 3.9 pp to 8.2% p.a. on pension reserves. Statistics on returns on NPFs’ invested pension resources are given in the table Key performance indicators for non-governmental pension funds.
NPFs’ returns were pushed up by a favourable situation in the debt instrument market amid an expansion of investments in bonds. Stable growth in the equity market was another positive factor. During the first 9 months of the year, positive returns on pension savings were demonstrated by all 33 NPFs engaged in mandatory pension insurance, and positive returns on pension reserves were recorded in 44 of 47 funds dealing with non-governmental pension coverage.
Returns on NPFs’ pension savings exceed returns on pension savings invested by the Pension Fund of Russia (PFR) for the third consecutive quarter.
In July—September 2019, NPFs’ investment portfolios maintained the trend towards reduction in the proportion of shares and increase in the proportion of corporate bonds. This was driven by both a positive revaluation of debt instruments and sales of certain issuers’ shares. As before, the real sector prevails in pension savings (37%), yet its share slightly shrank during the quarter (by 1 pp). Contrastingly, the share of the real sector in pension reserves expanded by 1 pp to total 30%.
As of the end of 2019 Q3, pension resources of the PFR and NPFs exceeded 6 trillion rubles. During the period July—September 2019, NPFs’ investment portfolio of pension resources reached 4.2 trillion rubles, which includes 2.8 trillion rubles of pension savings (+1.9% QoQ) and 1.4 trillion rubles of pension reserves (+2.5% QoQ).