August 2023 Monthly Report

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

At the end of August 2023, mandatory pension funds (MPFs) had 2,220,479 members, i.e. 9,820 (0.44%) members more than in the previous month. Category B funds had 82.8% of all MPF members, while category A and category C funds had 12.8% and 4.4% of all MPF members respectively. Out of 10,860 new members, 10,658 (98.1%) were automatically allocated by Regos. Termination of membership due to retirement or death was recorded with respect to 1,040 insured persons. Total net contributions paid to MPFs in August amounted to EUR 108.6m (0.6% of net assets at the end of July). At the same time, total payments from all MPFs due to personal account closures reached EUR 19.1m (0.1% of net assets at the end of July), decreasing by EUR 9.4m compared to the previous month.

At the end of August 2023, MPFs’ net assets amounted to EUR 19.3bn, rising by EUR 126.9m (0.7%) relative to the previous month. Nominal monthly Mirex returns reached 0.2% for category A, 0.3% for category B and 0.04% for category C. Annual Mirex returns reached 9.4% for category A, 4.5% for category B, and -0.1% for category C. Annualised[1] Mirex index returns since the beginning of MPFs’ operation reached 7.0% for Mirex A, 5.1% for Mirex B and 3.2% for Mirex C[2].

At the end of August, bond investments of MPFs totalled EUR 12.0bn (62.0% of total assets), making their share increase by 0.3 p.p. on a monthly basis. The share of equity investments in MPFs’ assets rose slightly (by 0.04 p.p.) on a monthly basis, amounting to 22.1% of MPFs’ assets at the end of August 2023 (EUR 4.3bn). Investments in domestic shares accounted for 13.6%, while investments in foreign shares accounted for 8.5% of MPFs’ assets. Investments in investment funds amounted to EUR 2.2bn (11.3% of the assets), making the proportion of these investments in total assets fall by 0.2 p.p. relative to the previous month. Investments in cash and deposits amounted to 3.3% of the assets, or EUR 630.7m.

THIRD PILLAR PENSION FUNDS

At the end of August 2023, the number of members of 8 open-ended voluntary pension funds (OVPFs) rose by 0.3% on a monthly basis, while the number of members of 21 closed-ended voluntary pension funds (CVPFs) increased by 0.1%, making the number of members of these funds reach 385,494 and 47,958 respectively. Total monthly payments made to voluntary pension funds (VPFs) in August 2023 amounted to EUR 8.0m (0.7% of their net assets at end-July 2023), decreasing by EUR 0.2m (2.0%) compared to the previous month. Total payments made from these funds reached EUR 3.0m, decreasing by EUR 0.2m (6.1%) compared to total payments made from VPFs in the previous month. Total payments from VPFs made due to retirement and other reasons accounted for 73.2%, payments made due to the change of fund reached 22.8%, while those made due to death accounted for 4.0% of total payments. As regards payments made due to retirement, the amount of EUR 1.2m was paid through a pension company (fund), the amount of EUR 0.6m was paid in the form of lump-sum payments, while the amount of EUR 0.5m was transferred for payment to pension insurance companies.

In August, VPFs’ net assets increased by EUR 8.3m (0.7% on a monthly basis) and stood at EUR 1.2bn. Monthly nominal returns of VPFs ranged from -0.5% to 0.7%, while returns on an annual basis ranged from 0.1% to 10.5%. As regards the investment structure of VPFs, the largest part of the portfolio was made up of bonds and amounted to a 54.4% share in total net assets, followed by stocks with a 24.3% share and investment funds with a 10.2% share. The share of bonds in VPFs’ investments increased on a monthly basis by 0.4 p.p., the equity share rose by 0.1 p.p., while the share of investments in investment funds declined by 0.2 p.p.

INSURANCE COMPANIES

In August 2023, there were 15 insurance companies operating on the market. Their total gross written premium collected in the first eight months of 2023 amounted to EUR 1.2bn, of which EUR 196.2m (17.0%) related to life insurance premium and EUR 980.1m (83.0%) to non-life insurance premium. The structure of the collected non-life insurance premium is dominated by motor vehicle liability insurance (35.1%), followed by insurance of land vehicles (17.7%) and insurance against fire and natural disasters (9.4%). The amount of claims settled in the first eight months of 2023 reached EUR 725.3m. EUR 289.6m of this amount related to life insurance (39.9%), while EUR 435.8m related to non-life insurance (60.1%). Within the total amount of claims settled in non-life insurance, the largest amounts related to motor vehicle liability insurance (42.1%), insurance of land vehicles (21.1%), and insurance against fire and natural disasters (7.8%).

CAPITAL MARKET

The total turnover on the Zagreb Stock Exchange reached EUR 45.1m in August 2023, increasing by 52.2% on a monthly basis. Market capitalisation increased by 1.0% relative to the previous month and stood at EUR 39.1bn, of which stocks amounted to EUR 21.3bn, bonds to EUR 17.9bn and ETFs to 15m. As for stock indices, the largest monthly rise was recorded by CROBEXprime (7.6%), while CROBEXtransport recorded the largest monthly decrease (2.9%). The main ZSE stock index (CROBEX) also rose (by 1.8%), as did CROBEX10 (by 4.9%). The ZSE stock indices (CROBIS and CROBIStr) recorded a monthly decrease of 0.5% and 0.3% respectively. Podravka d.d. was the stock most traded in August, with its turnover amounting to EUR 11.6m (32.8% of the overall trade in stocks in August) and a 22.3% monthly price increase.

INVESTMENT FUNDS

In August 2023, there were 107 UCITS operating on the market, two fewer than in the previous month, as a bond fund and a fund categorised as “other” ceased to operate. Total net assets of UCITS amounted to EUR 2.1bn at the end of the month, decreasing by EUR 7.5m or 0.4% compared to the previous month. Total monthly net payments of all UCITS in August were positive and reached EUR 16.1m. Negative net payments were recorded by balanced funds (EUR -2.6m) and funds categorised as “other funds” (EUR -1.5m). Positive net payments were recorded by bond funds (EUR 19.2m), equity funds (EUR 0.8m) and feeder funds (EUR 0.2m). Bond funds’ net assets accounted for 40.5% of the total net assets of all UCITS at the end of August, while equity and balanced funds accounted for 16.3% and 13.4% of total UCITS’ net assets respectively. In August 2023, negative asset-weighted average monthly returns were generated by almost all types of UCITS, namely equity (-0.7%), feeder (-1.2%), balanced (-0.5%), and other (-0.1%) funds, while only bond funds recorded a positive return (0.02%).

The assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to EUR 141.5m (a monthly decrease of 0.2%), with the monthly return of the fund reaching -0.1%.

The full report is available at Publications/Monthly reports.