Dear Participants of the “OTP Pension” and “FreeFlight” Pension Funds,
We invite you to review the performance results of OTP Capital’s non-state pension 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.
PERFORMANCE OF NON-STATE PENSION FUNDS
OTP PENSIYA
Fund Portfolio
In March, the “OTP Pensiya” fund sold UAH 67.6 million worth of government bonds (OVDPs) and acquired new OVDPs worth UAH 73.8 million with higher yields. The fund’s deposit holdings were allocated as follows:
- UAH 38.4 million in JSC “Universal Bank”,
- UAH 10 million in JSC “State Savings Bank of Ukraine” (Oschadbank).
Financial Results
- Net Asset Value (NAV) at the end of March: UAH 673.5 million
- Fund assets increased by ↑UAH 14.7 million (2.2%)
- Contributions received: UAH 7.3 million
- Pension payouts: UAH 667.9 thousand
Performance
Portfolio rebalancing helped offset the decline in bond value caused by rising yields. In March, the fund achieved:
- Monthly return: 1.2%
- 12-month return: 15.6%
FRIFLIGHT
Fund Portfolio
In March, the assets of the “FriFlight” fund were allocated as follows:
- USD 77,000 in JSC “Creditwest Bank”
- USD 15,000 in JSC “Sense Bank”
- USD 39,000 in JSC “PUMB”
- UAH 1 million in JSC “Ukrgasbank”
Financial Results
- Net Asset Value (NAV) at the end of the month: UAH 66.9 million
- Fund assets increased by over ↑UAH 1.3 million (1.9%)
- Contributions received: over UAH 1.5 million
- Pension payouts: UAH 132.5 thousand
Performance
The decline in the value of foreign currency government bonds (OZDPs) in March had a negative impact on the fund’s performance:
- Monthly return: -0.1% in USD
- 12-month return: 11.2% in USD
