As of the fourth quarter of 2023, the net assets of voluntary pension funds in Serbia surged to 53.8 billion dinars, reflecting an impressive 11.5% increase compared to the end of 2022. The data, sourced from the National Bank of Serbia (NBS) report on the voluntary pension fund sector, also indicates a 2.7% rise compared to the preceding quarter.
This upward trend in net asset value is attributed to several factors, including net fund inflows, payouts, and profits derived from fund investments.
Throughout 2023, total net contributions reached 4.3 billion dinars, up from 3.7 billion in 2022. Concurrently, total member payouts amounted to 2.7 billion dinars, down from 3.5 billion dinars in the previous year.
Despite economic and geopolitical shifts during the year, the sector managed to maintain stability and profitability. The voluntary pension funds recorded a total investment return (profit) of 3.9 billion dinars for the year.
Analysis of voluntary pension fund asset structure
The investment composition of the funds remained relatively steady at the close of the fourth quarter of 2023 compared to the previous period.
Government bonds retained the largest share, constituting 70.1% of total assets. Cash reserves and term deposits held in banks represented 17.8%, while investments in stocks accounted for 10.8%. Additionally, investments in units of open-end investment funds comprised 0.9%, and receivables made up 0.4% of fund assets.
The dominance of government debt instruments, particularly Republic of Serbia bonds, persisted in the fund portfolios. Although there was a slight decrease in share from 74.5% at the end of the previous quarter to 70.1% by the fourth quarter of 2023, compared to 76.6% in 2022.
The exposure to domestic legal entity stocks remained stable at 10.8% of total fund assets, consistent with the end of 2022 figures.
The average maturity of funds invested in government debt instruments stood at 5.5 years. Furthermore, the distribution of government debt instruments by maturity showcased a varied profile, with 9.4% maturing within a year, 5.7% within one to two years, 36.5% within two to five years, 43.8% within five to ten years, and 4.6% over ten years.
At the close of the fourth quarter of 2023, the composition of total assets showed 78.2% denominated in the local currency and 21.8% in foreign currency (euros).
