It follows from the submitted reports: the total amount of pension assets under management as of June 1, 2022 amounted to about 12.8 trillion tenge. At the same time, UAPF pension assets held in trust by the NBRK amounted to KZT12,747.21 billion. Pension assets under IPM management amounted to KZT8.7 billion.

Investment portfolio of pension assets managed by the NBRK

As of June 1, 2022, within the framework of the directions approved by the Council for the Management of the National Fund of the Republic of Kazakhstan, the main investments of the NBRK (as a trustee) in financial instruments are as follows:

˗ the main share in the UAPF PA portfolio is occupied by government securities of the Ministry of Finance of the Republic of Kazakhstan, the current value of which amounted to KZT5,329.37 billion. Their share in the portfolio amounted to 41.81%. As of June 1, 2022, the weighted average yield to maturity on government securities of the Ministry of Finance of the Republic of Kazakhstan, denominated in tenge, was 10.8% per annum, in US dollars - 3.4% per annum.

˗ bonds of quasi-public organizations of the Republic of Kazakhstan with a current value of KZT1,696.39 billion (the share in the portfolio was 13.31%). The weighted average yield to maturity on bonds of quasi-public organizations of the Republic of Kazakhstan, denominated in tenge, amounted to 10.9% per annum, in US dollars - 5.5% per annum.

- bonds of second-tier banks of the Republic of Kazakhstan in the amount of KZT931.25 billion (7.31%). As of the reporting date, the weighted average yield to maturity on bonds of second-tier banks of the Republic of Kazakhstan amounted to 10.5% per annum.

- foreign government securities in the liquidity sub-portfolio amounted to KZT686.27 billion. Their share in the portfolio was 5.38%. The weighted average yield to maturity of government securities of foreign states in the UAPF PA portfolio as of the reporting date was 0.8% per annum.

- bonds of international financial organizations amounted to KZT399.86 billion. Their share in the portfolio was 3.14%. The weighted average yield to maturity on bonds of international financial organizations amounted to 9.80% per annum.

- the current value of deposits in the National Bank of the Republic of Kazakhstan as of the reporting date amounted to KZT397.92 billion. Their share in the portfolio was 3.12%. The weighted average yield is 13.19% per annum.

- cost of shares and depositary receipts of issuers of the Republic of Kazakhstan amounted to KZT221.18 billion. Their share in the portfolio was 1.74%. In the period under review, there were no purchases and sales of shares and depositary receipts of RK issuers

- deposits in second-tier banks amounted to KZT198.89 billion. Their share in the portfolio is 1.56%. The weighted average yield to maturity of deposits of STBs of the Republic of Kazakhstan as of the reporting date was 9.1% per annum.

- cost of corporate bonds of foreign issuers amounted to KZT5.28 billion. Their share in the portfolio was 0.04%. The weighted average yield to maturity of corporate bonds of foreign issuers in the UAPF PA portfolio as of the reporting date was 9.6% per annum.

- cost of PPN (structured notes) of foreign issuers in the reporting month amounted to KZT11.14 billion. Their share in the portfolio was 0.09%. There were no sales, redemptions or purchases of PPN (structured notes) by foreign issuers.

- cost of corporate bonds of issuers of the Republic of Kazakhstan amounted to KZT16.41 billion. Their share in the portfolio was 0.13%. In the period under review, there were no purchases, sales and redemptions of corporate bonds of RK issuers.

In addition, the structure of the investment portfolio includes REPO in amount of KZT135.27 billion (share in the portfolio 1.06%), cash on investment accounts KZT12.62 billion (0.10%) and index asset management KZT2,705.36 billion (21.22%), including government securities of developed countries, government securities of developing countries, assets under external management.

The investment portfolio broken down by currencies into which financial instruments purchased with pension assets are denominated is presented as follows:

investments in the national currency - 70.87%, in US dollars - 29.05%, in other currencies - 0.08% of the portfolio of pension assets.

The amount of accrued investment income since the beginning of 2022 has been negative and amounted to KZT154.09 billion. The main reasons for negative investment income according to the NBRK survey are:

growth in yields (decrease in prices) on bonds of developed and developing countries, including government securities of the Republic of Kazakhstan, against the backdrop of an increase in the key rate of the US Federal Reserve this year by 75 b.p. up to 1.0% and growth of geopolitical tensions;

decline in the global equity market amid an accelerated phasing out of stimulus by the US Federal Reserve and other central banks in the fight against inflation in the world, as well as the risks of a recession in the economy and lower profits (the MSCI World index, which is the benchmark for external equity-mandated pension asset managers, fell by more than by 12%);

strengthening of the tenge exchange rate as of the reporting date since the beginning of the year by 4.0% from 431.8 to 414.67 tenge per US dollar (about 30% of pension assets are denominated in foreign currency, including assets under external management).

As a result of the above factors, the profitability of UAPF pension assets distributed to the accounts of contributors (beneficiaries) from the beginning of 2022 amounted to (-1.35%).

At the same time, as of June 1, 2022, the profitability of pension assets for the last 12 months (from June 2021 to May 2022) for UAPF contributors (beneficiaries) amounted to 4.14%.

The cumulative return for the period from April 2014, when the consolidation of pension assets was completed, to May 2022 amounted to 99.94%. For 8 years from 2014 to 2021, in annual terms, the return on pension assets of the UAPF is 9.68% per annum.

It is worth emphasizing that pension savings are long-term investments and it is advisable to analyze the amount of investment income for a period of at least 1 (one) year. Short-term data (weekly, monthly, etc.) are not indicative, because subject to constant changes in market conditions.

A detailed structure of the investment portfolio of financial instruments managed by the NBK, indicating issuers and an overview of investment activities, are posted on the official website of the UAPF.

Recall that in Kazakhstan there is a model of the state guarantee of the safety of pension savings. In accordance with Article 5 of the Law of the Republic of Kazakhstan On Pension Provision in the Republic of Kazakhstan, the state guarantees recipients the safety of compulsory pension contributions and compulsory occupational pension contributions to the UAPF in the amount of actually made contributions, taking into account the inflation rate at the time of obtaining the right to pension benefits.

Investment Portfolio Managers

The total amount of funds managed by IPM is KZT8.7 billion.

Pension assets held in trust by Jusan Invest JSC amounted to KZT3.94 billion. They were used to purchase: cash on investment accounts (45.98%), shares of Exchange Traded Funds (ETF) they account for 31.44%, government securities of the Ministry of Finance of the Republic of Kazakhstan (18.37%), NBRK notes (4.21% of the portfolio). Note that 64.04% of the portfolio is presented in tenge, 35.96% in US dollars.

As a result of investment activities, the profitability of pension assets managed by Jusan Invest JSC since the beginning of the year amounted to (-1.10%).

A detailed structure of the investment portfolio of financial instruments managed by Jusan Invest JSC, indicating issuers, is presented on the UAPF website.

As of June 1, 2022, pension assets held in trust by Halyk Global Markets JSC amounted to KZT2.47 billion. In the portfolio structure, cash on accounts is 53.98%, equity instruments of foreign issuers (ETF Units) 14.85%, bonds of quasi-governmental organizations of the Republic of Kazakhstan 10.73%, shares and depositary receipts of foreign issuers 5.88%, bonds of second-tier banks RK 5.71%, corporate bonds of RK organizations 4.47%, MFIs 4.39%. Investments in the national currency amounted to 78.20% of the portfolio, in US dollars - 20.80%. Profitability of pension assets managed by Halyk Global Markets JSC from 01.01.2022 until 01.06.2022 amounted to (-3.73%).

A detailed structure of the investment portfolio of financial instruments managed by Halyk Global Markets JSC with indication of issuers is presented on the UAPF website.

Pension assets held in trust by BCC Invest JSC as of June 1 of this year amounted to KZT1.41 billion. They are distributed in government bonds 32.65%, shares (ETF for indices) 21.54%, bonds of quasi-governmental organizations of the Republic of Kazakhstan 12.98%, shares and depository receipts of foreign issuers 8.68%, cash on investment accounts 7.30 %, IFO bonds 6.10%, bonds of second-tier banks of the Republic of Kazakhstan 5.46%, corporate bonds of resident issuers of the Republic of Kazakhstan 5.22%, other assets (accounts receivable, overdue debt, provisions) 0.06%. 69.71% of the portfolio was invested in instruments in national currency, 30.29% in US dollars.

As a result of investment activities, the profitability of pension assets managed by JSC "BCC Invest" since the beginning of this year amounted to (-3.53%).

A detailed structure of the investment portfolio of financial instruments managed by BCC Invest JSC, indicating issuers, is presented on the UAPF website.

As of June 1, 2022, UAPF pension assets held in trust by Centras Securities JSC amounted to KZT0.90 billion. They are invested in government securities of the Ministry of Finance of the Republic of Kazakhstan 56.85%, bonds of quasi-state organizations of the Republic of Kazakhstan 14.07%, funds on investment accounts 10.65%, shares and depositary receipts of issuers of the Republic of Kazakhstan 9.28%, REPO 7.03%,

equity instruments of foreign issuers (ETF Units) 1.86%, other assets (accounts receivable, overdue debt, provisions) 0.27%. 88.18% of the portfolio was invested in instruments in national currency, 11.82% in US dollars.

As a result of investment activities, the profitability of pension assets managed by Centras Securities JSC since the beginning of 2022 amounted to (-4.88%).

A detailed structure of the investment portfolio of financial instruments managed by Centras Securities JSC with an indication of issuers is presented on the UAPF website.

Recall that after receiving pension assets from UAPF, IPM invests them in permitted financial instruments specified in the Rules for the implementation of investment portfolio management activities, approved by the Resolution of the Board of the National Bank of the Republic of Kazakhstan dated February 3, 2014 No. 10, and provided for in the IPM Investment Declaration.

When transferring pension savings to IPM management, the state guarantee is replaced by the guarantee of the management company to ensure the minimum level of profitability of pension assets. The minimum level of return is calculated on the basis of the weighted average return on pension assets transferred to the management of an IPM operating on the market.

The UAPF was established on August 22, 2013 on the basis of GNPF APF JSC. The UAPF founder and shareholder is the Government of the Republic of Kazakhstan represented by the State Institution “Committee of State Property and Privatization” of the Ministry of Finance of the Republic of Kazakhstan. UAPF pension assets are managed by the National Bank of the Republic of Kazakhstan. From January 1, 2016, the functions for developing proposals to improve the management of pension assets were transferred to the National Fund Management Council. In accordance with the pension legislation, the UAPF attracts compulsory pension contributions, compulsory occupational pension contributions, voluntary pension contributions, pension benefits, individual accounting of pension accumulations and benefits, provides the contributor (beneficiary) with information on the status of his pension accumulations (for more information visit www.enpf.kz)