Dear investors,
We are pleased to present to you the market overview and the performance of OTP Capital’s mutual investment funds for February 2025.
GENERAL ECONOMIC SITUATION IN UKRAINE
February 2025 was marked by a sustained high inflation rate of 12.9% year-on-year. However, month-on-month inflation slowed to 1.2% from 1.4% in January. It is expected that the National Bank of Ukraine (NBU) will respond to this trend with another increase in the key interest rate by 50-100 basis points during the monetary committee meeting in early March.
Demand for foreign currency decreased in February due to the increased attractiveness of UAH-denominated instruments following the hike in the key interest rate to 14.5%. Thanks to NBU interventions, the hryvnia maintained its position, strengthening from 41.74 UAH/USD to 41.60 UAH/USD on the official market and from 42.06 UAH/USD to 41.80 UAH/USD on the cash market. In the coming months, a controlled devaluation to the range of 43-44 UAH/USD is expected.
Demand for government foreign currency bonds (OZDP) remained high, especially after the statements by the US President regarding the potential cessation of hostilities by Russia and the signing of an agreement on rare earth materials. As a result, the prices of OZDP increased by 3%-6% depending on the maturity, which positively impacted the returns of foreign currency funds.
UAH-DENOMINATED INVESTMENTS
In February, the Ministry of Finance issued domestic government bonds (OVDP) on the primary market with the following yields:
- 6% for 1.5-year OVDPs
- 6% for 2.5-year OVDPs
- 14%-16% for “reserve” 3.5-year OVDPs, which were in high demand among banks.
Interest rates for term deposits in UAH continued their slow growth, increasing by 25-50 basis points, reaching levels of 9%-14%, depending on the bank.
FOREIGN CURRENCY INVESTMENTS
Yields on foreign currency OVDPs remained stable:
- On the primary market:
- 6%-4.7% in USD
- 25% in EUR
- On the secondary market:
- Up to 4.2% in USD
- Up to 3% in EUR
The increased demand for OZDP in February led to a price rise of 3%-6%, which positively affected the returns of foreign currency funds.
RESULTS OF FUNDS UNDER OTP CAPITAL MANAGEMENT
OTP Classic Fund
In February, the fund sold government bonds (OVDP) worth 18.9 million UAH and purchased government bonds worth 20 million UAH with a longer maturity and higher yield. No transactions took place in the deposit portion of the portfolio.
In the reporting month, the “OTP Classic” fund earned 1.0% for its participants. Over the last 365 days, the fund generated an annual return of 14.4%.
OTP Kids Fund
In February, the fund sold government bonds (OVDP) worth 6.8 million UAH and purchased government bonds worth 6.9 million UAH with a higher yield, without increasing the maturity period.
In the reporting month, the “OTP Kids” fund earned 0.8% for its participants. Over the last 365 days, the fund generated an annual return of 14.8%.
OTP Currency Fund
There were no transactions with the assets in the portfolio in the reporting month.
The increase in the value of foreign currency government bonds (OZDP) brought the “OTP Currency” fund a 1.7% return in February, with an annual return of 17.8% in USD over the last 365 days.
OTP Equity Fund
The management of the “OTP Equity Fund” in February focused on reallocating funds into short-term deposits at the highest rates. Specifically, deposits were reallocated in JSC “Ukreximbank” for 1 million UAH.
The sale of shares of JSC “Raiffeisen Bank” on the PFTS exchange caused a 21% decline in the share price in February. At the same time, the demand for shares of PJSC “Centrenergo” was overwhelming, and as a result, the share price rose by 62%, compensating for the negative impact from the decrease in the price of JSC “Raiffeisen Bank” shares.
In February, the “OTP Equity Fund” earned 2.2% return. Over the last 365 days, the fund generated an annual return of 26.8%.
Invest confidently with OTP Capital!
