Slovenian mutual fund managers saw assets under their watch rise by more than 20% last year to EUR 3.01 billion. The bulk of the growth was generated through an increase in the value of investment, with net payments into the funds amounting to EUR 83.6 million, NLB Skladi said on Wednesday.
Foreign providers managed EUR 221 million in assets as of the end of October, paying out EUR 1.7 million net. Receipts to the European Undertakings for the Collective Investment in Transferable Securities by the end of October totalled EUR 284 billion.
"It wasn't a record year but it was a very good year in Europe nonetheless," Kruno Abramovič, the CEO of NLB Skladi, told reporters in Ljubljana.
After a fall in 2018, NLB Skladi did not record an increase in payments until June or July 2019. "It took six months for investors to stop being jittery," said Abramovič, adding that a similar trend was observed in Europe, although it took only about three months there.
Board member Blaž Bračič said that NLB Skladi's market share in gross payments into mutual funds was 47.1%, and the market share in gross receipts 104.8%. "The rivals had outflows and we had inflows," he said.
Marko Bombač, chief analyst with NLB Skladi, noted that at the end of 2018, the manager had projected a 11% return on global shares for 2019, which was considered an upbeat projection. In fact global stock markets posted a growth of almost 30%, while euro corporate bonds posted a 6.3% growth.
"The obvious question after such a growth is whether time has come for profit-taking and a bit more conservative structure of investments in the portfolio," Bombač said, adding that NLB Skladi believed there was still plenty of room for growth in 2020.
Projections for bond investments this year are low, which tips the scales in favour of investment in stocks. "We expect a solid stock year, a bit under average," said Bombač. The mid scenario is for a growth of 7% for advanced and emerging markets, 9% for Western Balkan markets and 10% for Slovenia.
NLB Skladi favours Europe over the US, its projections for the US being on a par with those for developing markets, where countries are lagging with reforms. Key to the profitability of US shares will be the profitability of technological shares.
The manager is optimistic about European banking shares, has raised weightings of cyclic sectors such as raw materials and manufacturing and car industry, and has kept slightly above-average exposure to the software and services sectors.
A major topic of the year will be the US presidential elections with NLB Skladi projecting a narrow victory for Donald Trump, but also the possibility of a new US-China escalation. A global recession is not expected to hit until 2022, but it is expected to be deeper as it would be in 2021.