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Hungarian govt securities make up almost half of private pension fund portfolio

Hungarian government securities made up just under half of assets in Hungarian pension funds at the end of March, a report by pension fund association Stabilitas shows.

Securities issued by the state of Hungary made up 1,529bn of assets in the funds, or 48pc of the total, on March 31. Investment fund units accounted for HUF 1,085bn, or 33pc of the total, shares for HUF 343bn, or 11pc of the total, and mortgage bonds for HUF 78bn, or 2pc of the total. Foreign shares made up 4pc of assets in the funds and foreign investment fund units 11pc. About 2pc of assets were in bank accounts or cash and 4pc were in other instruments.

Hungarian private pension fund members had until the end of January to opt out of a move, together with their pension assets, to the state pension pillar. About 97pc of private pension fund members are returning to the pillar. These Hungarians will get any yield on their assets over the rate of inflation.

Stabilitas said on Thursday that HUF 2,800bn in private pension fund assets are being transferred to the state pension pillar, citing preliminary data two days after the valuation date for the transfer. The real yields on the fund, which pension members may ask for in cash, are expected to come to HUF 260bn, the association said.