The average monthly real yield of the mandatory private funds (Pillar 2) in Romania improved to a positive 1.9% in March, reversing the 0.5% and 0.4% negative real performances in February and January (when the inflation rates were higher), according to our calculations based on data published by the Financial Supervisory Authority (ASF).

The bright performance in March reflects the significant 7.1% advance of the BER-TR index of the blue chips traded at Bucharest Stock Exchange BVB (the index includes dividends besides capital gain), where the fund managers placed 23.9% of their Pillar 2 portfolio at the end of February (25.0% at end-March). The allocation ratio increased from 21.3% at the end of March 2023. The share of government bonds (which demonstrated comparatively lower performance recently) remains dominant, however, at 65.4% at the end of March 2024, up from 64.3% one year earlier.

The average monthly real yield over the past 12 months to March was positive 0.8%. Therefore, the combined real annual performance of the Romanian Pillar 2 pension funds reached 9.4% y/y. 

Nominally, the fund’s annual performance was 16.6% y/y, visibly driven by the 50% y/y advance of BET-TR.

The assets of Romania’s Pillar 2 pension funds increased by 30.7% y/y to RON135bn (€27bn) at the end of March 2024. 

Out of the RON31.7bn increase, RON13.5bn came from new contributions.

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iulian@romania-insider.com