Dear Participants!
We invite you to review the performance results of OTP Capital’s investment funds for March 2025.
GENERAL ECONOMIC SITUATION IN UKRAINE
In the first month of spring, consumer inflation remained high, reaching a peak of 13.4% year-on-year. This prompted the National Bank of Ukraine to continue its tight monetary policy. At the March meeting of the Monetary Policy Committee, the key interest rate was raised by another 1%, from 14.5% to 15.5%.
The main drivers of inflation growth were administratively regulated prices (+18.1%), fuel (+13.9%), and raw food products (+13%). At the same time, the pace of inflation is slowing: 1.4% in December 2024, 1.2% in January 2025, and 0.8% in February. If this trend continues in March, the NBU may leave the key rate unchanged in April. Otherwise, the 2025 forecast will be revised, taking into account increased uncertainty due to the situation in the United States.
The balance of supply and demand for foreign currency improved thanks to the growing attractiveness of hryvnia instruments. As a result, NBU interventions decreased from $3.6 billion in January–February to $2.06 billion in March, which allowed the hryvnia exchange rate to remain within the range of 41.2–41.7 UAH/USD.
The official exchange rate strengthened from 41.60 UAH/USD to 41.37 UAH/USD
UAH-DENOMINATED INVESTMENTS
In March 2025, the Ministry of Finance increased the yields on domestic government bonds (OVDPs):
- up to 16.35% for 1.5-year bonds,
- up to 17.45% for 2.5-year bonds,
- demand for the “reserve” 3.5-year bonds remained high, keeping their yields in the 15–16% range.
Interest rates on fixed-term deposits in hryvnia rose by 1–1.5%, reaching 10.5–15%.
The yield on foreign currency deposits in U.S. dollars remained stable – up to 2%, depending on the deposit term.
FOREIGN CURRENCY INVESTMENTS
Yields on government bonds at primary auctions:
- in euros: remained unchanged at 3.25%,
- in U.S. dollars: decreased from 4.6–4.7% to 4.5% due to high demand and limited supply.
The Ministry of Finance set a cap for the placement of dollar-denominated OVDPs at $200 million, while demand exceeded $500 million. The limited issuance volume on the primary market affected their value on the secondary market. Demand outpaced supply, resulting in decreased yields.
On the secondary market, government bonds were traded with the following yields:
- in U.S. dollars: not exceeding 3.4%,
- in euros: up to 1.4%.
Uncertainty in U.S. policy toward Ukraine and geopolitical factors led to a decline in the value of Eurobonds by 10–12%, depending on the maturity, which in turn impacted their yield.
RESULTS OF FUNDS MANAGED BY OTP CAPITAL
OTP Classic
In March, the “OTP Classic” fund sold government bonds (OVDP) worth 3.3 million UAH, while purchasing new OVDPs worth 3.4 million UAH with better yield. In the deposit portion, the fund placed 2.2 million UAH with Universal Bank (AT).
In the reporting month, the “OTP Classic” fund earned 0.9% for its participants and 15.1% annually over the last 365 days.
OTP Kids Fund
In February, the “OTP Kids Fund” sold OVDPs worth 7.3 million UAH and bought new OVDPs worth 32 million UAH with a higher yield.
In March, the fund earned 1.5% for its participants, and over the last 365 days, the fund generated a return of 19.2% annually.
OTP Equity Fund
The management of the “OTP Equity Fund” in March focused on reallocating funds into short-term deposits at the highest available rates. In particular, deposits were redeployed in Ukreximbank (1 million UAH) and Oschadbank (0.9 million UAH).
The demand for shares of Raiffeisen Bank on the PFTS exchange led to a 20% price increase in March, helping the fund improve its performance for the month. In March, the “OTP Equity Fund” earned 3.2% for its clients and 36.2% annually over the last 365 days.
OTP Currency Fund
In the reporting month, the “OTP Currency Fund” purchased OVDPs denominated in dollars, totaling 11 thousand USD.
The decline in the value of foreign currency-denominated OVDPs in March negatively impacted the performance of the “OTP Currency Fund” – resulting in a decrease of -5.8% in dollar terms for the month and 11.4% for the last 365 days.
