€32 mln gross return on investments on H1

he KPST completed the first half of 2014 with a very satisfactory performance of return on investments from the global financial markets. Through the investment of assets alone the gross value of pension savings of Kosovo contributors increased by 32 million EUR. Undoubtedly, this is a very satisfactory outcome and the Governing Board and Management of KPST are pleased to communicate this news to contributors.

The investment performance of KPST was mostly achieved from investments in equity open-end funds, albeit all the open-end funds had a positive performance during this period. The financial markets were positively affected by the improving economic indicators and the monetary support in the USA and EU.

In addition to investments in the global financial markets, at the end of the first half of 2014 the KPST had around 64 million EUR invested into Securities of the Government of Kosovo. The contribution of investments in Kosovo to the gross return on investment for the first half of the year was 456 thousand EUR.

KPST fund reaches the 1 billion Euro mark

The inflow of pension contributions from country’s employees continue to be very satisfactory, whereby the accumulated contributions were 62 million EUR for the first six months of 2014. The inflow of new contributions together with the return on investments helped in the increase of assets under management. AUM increased by 83 million EUR to 996 million EUR (December 2013: 913 million), taking into account 11 million EUR that were paid out from the fund for pensions, refunds and fees. It should be noted that on July 2nd, 2014, for the first time since its inception, the KPST pension assets surpassed the 1 billion EUR mark for assets under management, which is an indicator of positive developments in this institution 12 years after establishment.

Investment strategy

We reiterate that the Governing Board of the KPST, in late 2013 had approved the new investment strategy, which, in order to protect KPST investments in the best way possible during downward market cycles, has as its key objective the transition from asset allocation only, to risk allocation and risk diversification additionally. Following a call for bids for new investment funds at the end of this reporting two new investment funds were added to the portfolio through a single manager Nordea: the first is a dividend equity fund where 30 million EUR were invested, and the second is a multi-assets fund where 40 million EUR. These investments are expected to be followed by investments in new funds during Q3 in order to complete the transition to the new investment strategy.

Benefit payments

During this half of the year, the KPST paid out around 8 million EUR to 2,429 beneficiaries. During the same period of the previous year 5.7 million EUR were paid out to 2,013 beneficiaries. Since its establishment in 2002 and up to June 2014 the KPST has paid out 47 million EUR to 22,932 beneficiaries.

Table: Key indicators of the KPST performance during the first half of 2014 and 2013