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Mutual funds (TFI PZU)

Annual Report 2018 > BUSINESS > Business operations > Mutual funds (TFI PZU)
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Market situation

As at the end of December 2018, the total assets of the domestic mutual fund market stood at PLN 257 billion compared to PLN 279 billion as at the end of the previous year, representing a decrease by almost 8%.

In 2018, based on estimates by Analizy Online, net outflow (the balance of payments and withdrawals) from retail funds offered by TFIs exceeded PLN 22 billion. It was a difficult

year for the whole mutual fund market. However, the segment that was hit the hardest was that of non-public funds – their assets shrank by over PLN 16.3 billion. The unfavorable economic situation and market events caused a decrease in the assets of equity funds by more than PLN 7.8 billion and absolute rate-of-return funds by PLN 6.2 billion.

The only market segment that recorded growth were cash and money funds (an increase in assets by over PLN 15 billion).

Mutual fund companies – share in assets as at 31 December 2018 (in %)

TFI’s activity

Towarzystwo Funduszy Inwestycyjnych PZU (TFI PZU), part of PZU Group, operates on the mutual fund market. It offers products and services for both retail and institutional clients – including additional investment and savings programs forming part of the third pillar of the social security system: Individual Retirement Accounts (IRAs), Employee Savings Plans (ESPs), Employee Pension Plans (EPPs), Company Investment Plans (CIPs) and Group Pension Plans (GPPs) which additionally offer Individual Retirement Security Accounts (IRSAs).

At yearend 2018, TFI PZU had 36 funds and sub-funds in its portfolio, of which 29 were also offered to clients from outside the Group – in October the portfolio was supplemented with 6 new sub-funds forming part of inPZU SFIO Parasolowy passive funds available through the cutting-edge platform TFI PZU has also begun offering professional asset management services.

At the end of December 2018, TFI PZU managed a portfolio of net assets of nearly PLN 19.8 billion, representing a 7.7% market share. Accordingly, TFI PZU is among the largest mutual fund companies in Poland – as at 31 December 2018 it was ranked third in Poland according to reports published by IZFiA (Chamber of Fund and Asset Managers). TFI PZU is also the market leader in the employee pension plan segment among institutions operating in this market with net assets of nearly PLN 5.4 billion.

TFI PZU’s net assets (PLN billion)

At yearend 2018, the net asset value of funds managed by TFI PZU remained at a similar level as at yearend 2017. As regards the most popular solutions, very notable is the increase in assets managed by PZU Oszczędnościowy (former PZU Gotówkowy) by PLN 350 million, PZU PD Polonez by PLN 200 million, inPZU Obligacje Polskie by PLN +210 million, PZU Sejf+ by PLN 153 million, inPZU Obligacje Rynków Wschodzących by PLN 108 million, inPZU Akcje Polskie and inPZU Akcje Rynków Rozwiniętych by approx. PLN 100 million each.

The largest decreases in net assets were recorded at yearend 2018 by the following funds: PZU SFIO Universum, PZU Stabilnego Wzrostu MAZUREK, PZU Medyczny (former PZU Energia Medycyna Ekologia), PZU FIZ FORTE, PZU Akcji KRAKOWIAK, PZU Akcji Spółek Dywidendowych and PZU Akcji Małych i Średnich Spółek.

Changes in the asset value of individual funds were driven predominantly by:

  • active sales of funds as part of Employee Pension Plans;
  • active sales of PZU Oszczędnościowy and PZU Sejf+ to retail clients;
  • launch of inPZU SFIO Parasolowy, a new product line of passive funds;
  • difficult situation on the equity market causing outflows from this class of funds;
  • unfavorable sentiment towards closed-end funds on the domestic market.

Factors, including threats and risks, which will affect the mutual funds’ operations in 2019

The condition and performance of the mutual fund market will depend mainly on the following:

  • macroeconomic situation: mostly the rate of economic growth and changes in the rate of inflation domestically and throughout Europe;
  • actions taken by central banks (Fed, ECB, Bank of Japan, People’s Bank of China) translating into global money supply and liquidity on the financial markets;
  • intensity of global protectionism, in particular that surrounding the US-China trade war,
  • existing economic climate on financial markets;
  • global geopolitical situation (upsurge of populist sentiments in Europe, Brexit, tensions in the Middle East) and domestic political situation (parliamentary and presidential elections).
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