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Financial Analytics: Science and Experience
 

Companies that manage investment portfolios of non-governmental pension funds: the main trends and prospects

Vol. 8, Iss. 30, AUGUST 2015

PDF  Article PDF Version

Received: 14 May 2015

Received in revised form: 9 June 2015

Accepted: 29 June 2015

Available online: 30 August 2015

Subject Heading: FINANCIAL INSTRUMENTS

JEL Classification: 

Pages: 12-22

Fedorova E.A. Financial University under Government of Russian Federation, Moscow, Russian Federation
ecolena@mail.ru

Sedykh D.A. Financial University under Government of Russian Federation, Moscow, Russian Federation
d.sedykh@list.ru

Importance The managing company invests retirement savings and reserves, considering the regulator's restrictions and contracts with Pension Funds. As their main objective, managing companies are responsible for effective portfolio management by selecting the most promising issuing organizations that meet credit quality criteria, and striving for the maximum rate of return.
     Objectives The research analyzes portfolios and operations of Pension Fund managing companies. The analysis relies upon quarterly reports of 30 managing companies of the Russian Pension Fund.
     Methods We explore trends in economic indicators within 2004 through 2014. The research investigates trends in assets transferred on terms of trust and analyzes portfolios of managing companies (main types of assets in the managing company's portfolio, analysis of the rate of return on the aggregate investment portfolio). We also examine factors that influence employees' performance (salary, number of retirement savings management contracts with private pension funds) and review financial results.
     Results Following the analysis, we have found out that the portfolio efficiency and the managing company's performance, respectively, were affected with such assets as shares of open joint stock companies and bonds of the Russian profit-making entities. It refers to assets generating low dividend yield and high risk from revaluation of assets. Most companies try to consider this risk and mitigate it by placing or depositing their funds with credit institutions.
     Conclusions and Relevance Managing companies strive to increase the market value of investment portfolio by raising the value of its assets as a whole, but often neglecting such permitted financial instruments as bonds of external bond loans of the Russian Federation, government securities of the Russian Federation.

Keywords: management, company, retirement savings, investment portfolio, bond

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