+87.7m gross return for 2023
The Kosovo Pension Savings Trust ended the year 2023 with +87.7 million euros gross return from investments. This was the 19th year, out of 22 years of operation, where the institution has a positive result from the investment of pension savings. This led to a +750-million-euro gross return since inception.
The collection of new contributions in 2023, in the amount of 286 million euros, reflects a record increase compared to the previous year; both in nominal value (+44 million euros) but also as a percentage (+18.2%).
The new contributions, together with the return on investments, unlike savings withdrawals and fees, have contributed positively to the net assets under management increasing this year by +291 million euros and thus exceeding the value of 2.7 billion euros.
Table 1: Change in net assets under management.
| Portfolio | 2023 | 2022 | Change |
| Standard | €2,570,540,691 | €2,316,363,920 | €254,176,771 |
| Conservative | €131,267,932 | €94,812,043 | €36,455,889 |
| Total | €2,701,810,646 | €2,411,177,985 | €290,632,660 |
As we announced last year, from 2022 KPST operates with two investment portfolios: (1) Standard Portfolio – for contributors under the age of 63; and (2) Conservative Portfolio – for contributors aged 63 and over; and the reports for these two portfolios, which also have different performance, are presented separately.
Table 2: Gross returns from investments for 2021-2023
| Portfolio | 2023 | 2022 | 2021 | 2021-2023 |
| Standard | €83,010,837 | -€121,600,526 | €227,333,617 | €188,743,928 |
| Conservative | €4,652,708 | €2,719,123 | — | €7,371,831 |
| Total | €87,663,545 | -€118,881,403 | €227,333,617 | €196,115,759 |
STANDARD PORTFOLIO
Investment performance for the Standard Portfolio for 2023 was +3.05% (2022: -5.54%; 2021: +10.65%). The aim of this portfolio is to exceed the consumer price index (otherwise inflation) in Kosovo in the long term. Currently, the unit price of this portfolio has increased by 67.6% since inception, while inflation in Kosovo for 70.2%.
The actual Governing Board, appointed to office on July 13, 2023, has generally maintained the low-risk enterprise approach to Standard Portfolio investments from the previous Board. This is because the general economic-financial and geopolitical situation was obviously burdened by events with a high potential of negative impact on investment performance. This approach is expected to be reviewed during 2024.
THE CONSERVATIVE PORTFOLIO
In the Conservative Portfolio we had an increase of +3.47% of the unit price for 2023 (2022: +2.94%). Because the investments of this portfolio are only in the bonds of the Government of Kosovo, they are not affected by changes in the financial markets, therefore they have higher stability. The gross return of this Portfolio from the beginning (February 2022) has reached 5.1 million euros. The purpose of this portfolio is to preserve the value of the pension savings from the fluctuations in the financial markets of contributors who are very close to retirement and may not have sufficient time to recover.
EXPECTATIONS FOR 2024
There is an estimate that overall global economic growth for 2024 will be around 2.4%. This forecast estimates that this will be the third year in a row that the global economy will have a regression in economic growth. Under these conditions, and in the assessment of the growing geopolitical risks, the Governing Board of KPST is expected to continue with investment decisions that undertake moderate investment risk. However, the most important decision of the following year will be the initiation of the implementation of the third investment portfolio, for which there will be detailed announcements before its start.
Table 3: Summary of key indicators for 2021, 2022 and 2023
| INDICATOR | 2023 | 2022 | 2021 |
| Gross return for the year (both portfolios) | +€88m | -€122m | +€227m |
| Gross return since inception | +€750m | +€662m | +€784m |
| Net AUM | €2,700m | €2,400m | €2,353m |
| Unit Price – Standard Portfolio | €1.6764 | €1.6268 | €1.7222* |
| Unit Price – Conservative Portfolio | €2.1302 | €2.0588* | — |
| Collected contributions for the year | €286m | €241m | €212m |
| Pension withdrawal for the year | €66m | €55m | €68m |
| Retired during the year | 7,703 | 7,131 | 7,239 |
| Total accounts | 834,251 | 792,995 | 752,523 |
| Active accounts for the year | 442,383 | 428,891 | 419,657 |
| Assets in global markets | €2,013,518,137 | €1,689,250,011 | €1,808,309,791 |
| Assets in Kosovo TB | €447,135,504 | €553,752,102 | €491,503,672 |
| Assets in banks operating in Kosovo | €92,533,913 | €137,916,925 | €44,776,195 |
| Assets in cash | €149,901,531 | €31,133,146 | €9,313,041 |
| Investment fee | 0.32% | 0.32% | 0.32% |
| Operations fee | 0.05% | 0.057% | 0.057% |
*The Standard Portfolio was launched on August 1, 2002, with an initial price of €1.00 per unit.
The Conservative Portfolio was launched on February 16, 2022, with an initial price of €2.00 per unit