For the first nine months of 2020, VEB.RF earned about 6.7% per annum for the “silent people.” Compared to the first half of the year, the expanded portfolio of pension savings’ profitability has slightly decreased. At the same time, to maintain the profitability of investments, the public administrator continues to increase the share of corporate bonds in the portfolio, the volume of which has reached a historical maximum. Some of these securities were perpetual bonds issued by Russian Railways. VEB acts in a trend, going into a risk to obtain profitability. However, it does so in a state manner, experts say.
The profitability of the expanded portfolio, through which the state management company (GUK) VEB.RF invests the “silent” funds for nine months amounted to about 6.7% per annum. The calculations of Kommersant evidence this based on the company’s published statements.
Thus, the profitability slightly decreased compared to the six-month indicator (7.3% per annum).
The profitability of the government securities portfolio for three quarters also decreased more noticeably – from 9.2% to 8.2% per annum.
At the beginning of this year, VEB.RF managed pension savings of 38.6 million people, according to data from the Accounts Chamber. Most of them were “silent”, whose funds are in the expanded portfolio of the GAM. At the end of the third quarter, its volume exceeded 1.87 trillion rubles, while the portfolio of government securities did not exceed 35 billion rubles. Private management companies invested funds of 275 thousand insured persons who are in the PFR, in the amount of slightly more than 30 billion rubles. Another 37.2 million people form funded pensions in NPFs, the aggregate portfolio of which is approaching 3 trillion rubles.
The third quarter saw significant changes in the structure of VEB’s expanded portfolio. Thus, investments in corporate bonds reached an all-time high, exceeding RUB 777 billion. Thus, the trend towards an increase in the share of corporate bonds in the expanded portfolio structure, which was outlined a year ago, has continued ( see Kommersant dated August 12 ). At the end of the third quarter, the share of such investments exceeded 41%.
Simultaneously, in the explanatory note published in May on the change in the investment declaration of the expanded portfolio, which allowed VEB to invest in perpetual bonds, it was noted that GUK plans to acquire up to 100 billion rubles. Such debt securities of Russian Railways. VEB confirmed that they invested the funds of the “silent” pension savings in perpetual bonds of the transport state monopoly in the third quarter.
As explained in VEB, assets are flowing into corporate bonds, in particular, due to the redemption of government securities, as well as by reducing the volume of deposits.
According to the State Management Company reports, investments in bank deposits decreased by 12% over the quarter and at the end of September amounted to about 350 billion rubles. The previous main direction of investment of pension savings within the expanded portfolio – government securities – faded even further into the background during the quarter. The share of these securities compared to the second quarter decreased by 0.6 percentage points to 34.8% (653 billion rubles). Most of these investments are government savings bonds previously placed by the Ministry of Finance by private subscriptions and currently exceed half of all government bonds in the portfolio.
The growth of investments in corporate bonds is due to the attractive ratio between investment risk and profitability, ”said a representative of the State Management Company.
“To ensure competitive profitability in the current situation, one must take risks,” says Sergei Stukalov, CEO of Ronin Trust Management Company. According to him, VEB, increasing its investments in corporate bonds, in this case, acts in a general trend. “However, purchases of perpetual bonds of Russian Railways are a specific, state trend,” notes Mr. Stukalov.