The rising interest rate cycle boosted returns for pension funds, which offer higher returns

2024-03-25 07:24:00, Ekonomi CNA

The rising interest rate cycle boosted returns for pension funds, which offer

The cycle of rising interest rates has improved pension fund returns over the past year. According to the data from the management companies of these funds, most of the funds have increased the net annual return rate compared to the previous year.

The highest return on investment at the end of 2023 was offered by the Smart Pension fund, the newest fund of the management company Albsig Invest, with 4.62%.

This fund started its activity on 12.01.2023 and the return is calculated on this date. Meanwhile, according to the latest data reported by the management company, in March 2024, the fund's annual return has reached 5.23%. The highest net return is also related to the lowest administration commission that this fund has, at the rate of 1.5% per year on the net value of assets.

It follows with a small margin the Raiffeisen Pension fund, which at the end of 2023 offered an annual return on investment of 4.54%, from 4.09% that was the return at the end of 2022. According to the most recent data, from February 2024 , the fund's annual return was 4.53%.

Even this fund, which is administered by Raiffeisen Invest, has an administration commission of 1.5%.

The third highest return is offered by the Credins Pension fund, with 4.15%, up significantly from the level of 3.47% at the end of 2022. According to the latest data reported by the management company, in February 2024, the annual return of pension fund has reached 4.2%. Credins Pension is managed by the management company Credins Invest and has an annual management commission of 2.2%.

Albsig Pension follows, with an annual return on investment of 3.81%, also significantly increasing from the level of 2.75% in 2022. According to the latest data reported by the management company in mid-March, the annual return has reached to 3.9%. Albsig Pension is managed by the management company Albsig Invest and has an administration commission of 2.5%.

The fund with the lowest annual return at the end of 2023 was Sigal Pension, with 3.52%. The largest fund by asset value was the only one to experience a slight decline in its annual return, which at the end of 2022 had been 3.63%. According to the most recently reported data, from February 2024, the annual return has reached 3.57%. Sigal Pension is managed by the management company Sigal Life Uniqa Group Austria and applies an annual management commission of 2.2%.

The annual return is calculated as the annual change in the price of the quota, after deducting the management commission applied by the management company. In this way, the net return of pension funds is also affected by the amount of the administration commission, which is different for different pension funds and ranges between 1.5% and 2.5%.

Pension funds in Albania have a similar asset structure, which is overwhelmingly dominated by investments in Albanian government bonds. Also for this reason, the returns from the investment do not have very large differences, while the administration commission applied by each fund has a significant effect on the net return.

There are currently six private pension funds in the market, managed by four management companies.

In terms of net asset value, the largest fund is Sigal Pension with 41.29% of the total, followed by Credins Pension with 30.38%, Raiffeisen Pension with 20.73%, Albsig Pension with 7.33%, Smart Pension with 0.26% and Sigal Pro , with 0.01%.

According to the number of members, the largest actor in the market at the end of 2023 Credins Pension, with about 49.38% of the total number of members, followed by Sigal Pension with 29.45%, Albsig Pension with 10.68%, Raiffeisen Pension with 9.93% , Smart Pension, with 0.51% and Sigal Pro, with 0.06%./ Monitor magazine