KPST investments

Following the recent media reports of losses, the Kosovo Pension Savings Trust would like to clarify that the value of KPST investments fluctuate on daily basis and as such cannot be described as a loss but rather a decrease in the value of the investments (unrealized loss). Both up and down events are a natural part of financial markets in accordance with developments in the macro-financial and geopolitical world. The unrealized losses will turn into actual losses only if KPST sells the investments and withdraws the funds, which would make recovery and growth not possible in the future.

To better illustrate the periodic movements, it should be noted that in 2021, KPST had an gross return of +227 million Euro from investments. Also, KPST has a unit price increase of about 65% since the establishment of the institution, which proves the long-term benefits of being invested.

As for this year (2022), the performance of the January-June period is to be anticipated considering the current environment of the war in Ukraine, the energy crisis and double-digit inflation. In addition, since 30 June we had an increase in the value of KPST investments and as per last available date (31 August 2022), the “Standard” portfolio had a recovery of around +3%.

Despite this decrease, KPST investments fell less than the value of the main global indexes. For comparison, KPST share price depreciated by -4.5% as of 31 August 2022, whereas the MSCI World index fell by -16%, the S&P500 by -18% and the STOXX 600 by -15%. These arguments are to clarify that for the contributor it is important to analyze the state of the pension savings account from their initial contribution up to the current date, and not only for a calendar year – since the institution invests in long-term horizons.

A KPST contributor will directly realize the full effect of investments only when he or she retires. Precisely, in order not to harm the interest of contributors close to retirement, the KPST Governing Board has launched the Conservative investment portfolio, providing maximum protection to the accumulated funds of contributors aged 63.5 years and above. Their funds are invested only in the securities of the Government of Kosovo, which have a fixed norm of interest. For this year, this portfolio (Conservative) has a positive investment return of +1.8%.

The Governing Board during 2022 has made the maximum efforts by reallocating assets to the most defensive position. Currently, about 46% of all assets (or over 1 billion Euro) are placed in the money markets, bank deposits and in the Kosovo and securities of the Government of Kosovo.

On this occasion, we want to assure the contributors that in the long term their investments are made in the most prudent way and always based on the principles of the Law on Pension Funds. This is confirmed by the positive long-term performance, which can be verified by each contributor through his or her personal pension savings account.