Aggregate portfolio of funds managed by NPFs and SFR totals ₽7.4 trillion
In 2023 Q3, pension resources in both non-governmental pension funds (NPFs) and the Social Fund of Russia (SFR) continued to grow, albeit at a slower pace due to lower bond prices. The inflow of client funds was minimal.
More than six million people have entrusted their funds to the voluntary pension system. The number of NPF clients under the mandatory pension provision exceeds 36 million people.
Returns on investment of pension savings in NPFs amounted to 10.9% per annum over the first nine months of 2023. They were exceeding those on investment of pension savings in the SFR for the third month in a row. The reason was that NPF portfolios included equities which generated higher profits in this period. Returns on investment of NPF pension reserves were 10.1% per annum. Inflation was 6.2% per annum in this period.
NPFs reduced their investment in bonds, as prices for most debt instruments were declining amid rises in the key rate and inflation expectations. Some part of proceeds from securities sales was invested by the funds in money market instruments, for example, there was an increase in the portion of repo claims in NPF portfolios. In addition, NPFs built up their balances in current accounts and deposits, as interest rates on them were rising in the wake of the key rate hikes.
More details are available in the Review of Key Indicators of Non-governmental Pension Funds for 2023 Q3.