Private pension fund management companies markedly improved performance in the second quarter

The second quarter markedly improved the performance of private companies in managing the pension savings of citizens. Profitability for the first half of the year ranged from 5.6% to 35% per annum. This was mainly due to the recovery of the stock market, which, amid the weakening of the ruble, high dividends, and positive financial results of large companies, returned to the levels preceding the outbreak of hostilities in the Moscow Exchange index.

According to Kommersant’s estimates, based on data from six portfolios of five private management companies investing pension savings of citizens from the Pension Fund, the average weighted return on management for the first half of the year was almost 13% per annum, which is almost 3 percentage points better than in the first quarter.

This also exceeded the result of the state management company (GUK) VEB.RF. For half a year, the GUK earned 7.84% per annum for the “silent ones” within the framework of the government securities portfolio, and 8.8% per annum for the extended one. But on longer periods of time, the GUK shows better results. For three years, the average yield on the portfolio of government securities amounted to almost 7.5% per annum, on the extended one – 7.3% per annum. The weighted average yield on private management companies that published data for the same period was in the range of 2.9–6.3% per annum.

The strong dispersion of indicators of private management companies is due to the fact that many companies include in their portfolio shares that are prohibited for investing the pension savings of “silent people”. For example, in 2022, due to a collapse in the stock market at the beginning of the year, stock portfolios showed heavy losses (see Kommersant on January 21). This year, against the backdrop of active market recovery, they were among the growth leaders with an indicator of 14-35% per annum. During the reporting period, the Moscow Exchange index grew by almost 30%, to 2800 points. “Support was provided by a dividend rally in the most profitable securities,” adds Andrey Alekseev, asset manager at PSB Management Company.

Stocks are cheap, business is working, there are no other investment opportunities in Russia, so many management companies intend to continue to put up with increased market volatility. “We continue to maintain a high share of shares of Russian issuers in the PFR portfolio in accordance with the benchmark – an aggressive index of pension savings. We believe that the growth potential has not yet been exhausted,” explains Artem Mayorov, Director of the Asset Management Department at Ingosstrakh-Investments Management Company. Dmitry Postolenko, head of the fixed income management department at Pervaya Management Company, said that during the reporting period, papers from the ferrous metallurgy sector were purchased in addition. But not all managers are ready to keep a high proportion of shares in the portfolio. “A number of securities have shown significant growth since the beginning of the year, their potential is already limited, so we have reduced our stake in shares from 25% to 15%,” notes Andrey Alekseev.

Pension asset managers who take a more conservative approach receive more stable and fairly predictable returns each year. But even in such portfolios, adjustments need to be made depending on market conditions. In particular, PSB Management Company and Alfa Capital reduced the duration of their portfolios against the backdrop of increased inflationary risks in the economy, which could lead to an increase in the key rate.

At the same time, as Yevgeny Zhornist, portfolio manager of Alfa Capital Management Company, noted, the company was pointwise increasing the risk in corporate bonds. “In the second quarter, the duration of the portfolio was moderately increased, as investments in medium-term and long-term securities became more attractive against the background of the expected tightening of the monetary policy of the Central Bank,” said Ekaterina Zaitseva, CEO of Region Asset Management.

Interviewed market participants admit that already at the next meeting the Central Bank will raise the rate immediately by 50 basis points (bp). But the growth is already included in prices and should not greatly affect the profitability of portfolios, Evgeny Zhornist believes. But, Dmitry Postolenko clarifies, there is a high probability of a stronger increase by 100 bp at once. as inflationary risks have increased due to the weakening of the ruble. In this regard, floaters were added to the portfolio in his management company, preference was given to corporate securities: “The presence of floaters in bond portfolios reduces the negative effect of raising the key rate.”

Vitaly Gaidaev