Kazakh pension fund totals $27 billion, includes broad range of assets

NUR-SULTAN – The Unified Accumulation Pension Fund (UAPF) portfolio of pension assets totalled 10.43 trillion tenge (US$26.77 billion) as of Oct. 1, reported the Kazakh National Bank in a brief overview of the UAPF investment activities on pension assets for September.

Photo credit: inform.kz.

According to the Kazakh National Bank, 65.7 percent of the total portfolio is cash and financial instruments denominated in tenge, while 34.3 percent is denominated in foreign currency.

The pension assets investment denominated in tenge totalled 55.3 billion tenge (US$141.96 million). The pension assets purchased government securities of the Kazakh Ministry of Finance for 20.3 billion tenge (US$52.11 million) with a weighted average yield of 8.9 percent per annum; the bonds of Kazakhstan Temir Zholy – 20 billion tenge (US$51.34 million) and 11.5 percent per annum; RBK Bank bonds – 15 billion tenge (US$38.50 million) and 10.95 percent per annum as part of the lending mechanism for priority projects through the Kazakh second-tier banks for 600 billion tenge (US$1.5 billion).

The pension assets investment denominated in foreign currency, which totalled 211.4 billion tenge (US$542.68 million), bought U.S. government securities with a weighted average yield of 1.9 percent per annum.

In the reporting period, dollar-to-euro currency swap transactions concluded at $440 million for a period of six to nine months. As part of these transactions, the UAPF pension asset portfolio received 398.2 million euro (US$444.52 million).

Results of investment activities

The accrued investment income since the beginning of 2019 totalled 525.2 billion tenge (US$1.35 billion). Pension assets, which were distributed to the accounts of depositors (recipients) since the beginning of 2019, yielded 4.98 percent.

At the same time, as of Oct. 1, the return on pension assets for the past 12 months (from October 2018 to September 2019) for the UAPF depositors was 8.4 percent with 5.3 percent inflation. The pension assets of the UAPF, therefore, had 3.1 percent real return during the period.