Dear Participants of the “OTP Pension” and “FreeFlight” Pension Funds,
We would like to present the results of the non-state pension funds managed by OTP Capital 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 NON-STATE PENSION FUNDS
OTP Pension Fund
Portfolio of the Fund
In February, the portfolio of the fund saw the sale of government bonds (OVDP) worth 2.8 million UAH as part of the placement of free funds. The deposit part of the portfolio included investments of 5.1 million UAH in JSC “Ukreximbank”, 10.6 million UAH in JSC “State Savings Bank of Ukraine”, and 0.7 million UAH in JSC “Agroprosperis Bank”.
Financial Results
- Total net asset value (NAV) as of the end of February 2025: 658.8 million UAH
- Fund assets grew by 8.7 million UAH (1.3%)
- Contributions made: 7.8 million UAH
- Pension payouts: 420 thousand UAH
Performance
The decline in the value of government bonds amid a shift toward a more restrictive monetary policy by the NBU led to a decrease in the performance of the “OTP Pension” fund:
- Monthly return: 0.2%
- Annual return (last 365 days): 10.8%
FreeFlight Fund
Portfolio of the Fund
In February, the portfolio of the fund was actively rebalanced, leveraging arbitrage opportunities in short-term dollar-denominated government bonds (OVDP) on the secondary market. The deposit portion of the portfolio included 32 thousand USD in JSC “TASCOMBANK”, 66.5 thousand USD in JSC “Sense Bank”, and 2 million UAH in JSC “Ukrgasbank”.
Financial Results
- Total net asset value (NAV) as of the end of February: 65.6 million UAH
- Fund assets increased by 2.4 million UAH (3.6%)
- Contributions made: 2.3 million UAH
- Pension payouts: 10.9 thousand UAH
Performance
The slight increase in the value of foreign currency government bonds and the active portfolio rebalancing helped “FreeFlight” achieve the following performance in February:
- Monthly return: 0.9% in USD
- Annual return (last 365 days): 8.8% in USD
OTP Capital continues to monitor market conditions closely and adapt its investment strategy to ensure the preservation and growth of your savings.
Thank you for choosing the “OTP Pension” and “FreeFlight” pension funds for your financial future!
