Annual pension savings growth recorded after year-long stagnation
Rewritten Article:
Title: Kazakhstan Pension Fund: How Are Pension Savings Invested and What's the Performance?
In April, a breath of fresh air graced the investment world for the EPF (Unified Accumulative Pension Fund) managers, as they managed to rack up positive investment income. This positive stride was subsequently credited to the accounts of Kazakhstanis, shedding light on the active investment of their pension savings.
The accumulated pension savings of Kazakhstanis don't sit idly in a piggy bank, but are meticulously invested in various financial instruments designed to generate extra income. The National Bank of the RK and private investment portfolio managers (IPM) play key roles in these investments, while the UAPF (Unified Accumulative Pension Fund) primarily serves as a "savings vault."
The investment landscape wasn't exactly a bed of roses in 2025. In January, some Kazakhstanis noticed a discouraging dip in their savings, a consequence of the missteps by the investment managers. February and March followed suit with a continued decrease in investment returns. However, the tides turned in April, as data from individual pension accounts revealed an unprecedented increase in returns - a feat accomplished by all managers. There's a catch though.
April's profits failed to cover past losses
Contrary to popular belief, not every manager has managed to wipe away the slate clean, as of May 1. The annual returns reveal the following:- National Bank of the RK: -1.05% and -5.94% for mandatory and voluntary contributions and mandatory pension contributions by employers (MPCE), respectively;- Halyk Finance: **0.45%;- "Sentras Securities": **2.32%;- Jusan Invest: **1.38%;- Halyk Global Markets: **1.62%;- BCC Invest: 4.02%.
While all private companies have joined the party, the National Bank of the RK is still playing catch-up. If current trends continue, they'll be back in the green shortly.
In a nutshell, short-term investment losses are not only to be expected but also undermine absolutely no long-term significance.
Moreover, Kazakhstanis need not fret over the dip in returns. Their savings are safeguarded by state guarantees, meaning they'll be compensated if they suffer from inflation.
The same protection extends to the savings that contributors have entrusted to private companies for management. However, the responsibility for their safety lies squarely with the investment managers themselves.
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More Insights
Kazakhstan's UAPF operates under a mandatory defined contribution system where employers and employees each chip in 10% of the employee’s salary[5]. While the National Bank of Kazakhstan oversees UAPF's portfolio, the specific role of private investment portfolio managers (IPMs) isn't entirely clear. However, insightful inferences can be drawn:
Management Structure
UAPF’s portfolio is managed under the purview of the National Bank of Kazakhstan[2], which looks after trust management agreements for state funds, including the National Fund[4]. The National Bank's digitalization strategy emphasizes AI and data-driven decision-making, suggesting a centralized management approach[3]. Private IPMs might work indirectly through partnerships or sub-advisory roles within this setup, though direct evidence is sparse in the provided sources.
Performance Drivers
The fund's returns hinge on market conditions, particularly given its exposure to financial assets managed by the National Bank[2]. Key factors include:- Asset allocation: The portfolio includes diverse investments (e.g., bonds, equities), with performance closely tied to global and domestic market fluctuations.- Regulatory oversight: Kazakhstan's push for AI-guided decision-making at the National Bank hopes to optimize returns by refining risk assessment and asset allocation[3].
Market Condition Impact
- Volatility: Global oil price fluctuations (a key revenue source for Kazakhstani funds[4]) and economic stability directly impact asset valuations in UAPF's portfolio.
- Digital reforms: Open banking and supervisory technology initiatives could boost liquidity management and transparency, thereby tempering investment volatility[3][4].
- Despite the losses incurred in 2025's early months, the Kazakh pension savings, managed by the EPF, showed a significant recovery in April, reflecting the dynamic nature of investing.
- The annual returns for May 1st reveal that while some private companies have yielded positive results, the National Bank of the RK is still recuperating from losses, particularly for mandatory and voluntary contributions and mandatory pension contributions by employers (MPCE).
- Despite the short-term losses, their long-term significance is minimal, as they do not undermine the overall wealth-management strategy for Kazakh pension savings.
- State guarantees ensure that Kazakh pension savers are protected from inflation, offering an added layer of security for their personal-finance goals.
- While the National Bank of Kazakhstan oversees the UAPF's portfolio, the specific role of private investment portfolio managers (IPMs) within this structure is not entirely clear, indicative of a potential partnership or sub-advisory relationship.
