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Saving and Investment Products in Poland Major Developments

Saving and Investment Products in Poland Major Developments. Magdalena Jagodzińska Head of Compliance and Operational Risk Management KBC TFI SA. Types of products. Individual Pension Accounts. Investment funds. Legal framework Act of 27 May 2004 on investment funds

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Saving and Investment Products in Poland Major Developments

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  1. Saving and Investment Products in Poland Major Developments Magdalena Jagodzińska Head of Compliance and Operational Risk Management KBC TFI SA

  2. Types of products Individual Pension Accounts

  3. Investment funds • Legal framework • Act of 27 May 2004 on investment funds • Aligned with the EU laws • Passporting rules • Types of funds • Open-end (UCITS and non-UCITS) • Closed-end (securitization funds, private equity, real estate funds, ETFs, private placement funds) • Other • Investment fund + deposit • Unit-link structures based on investment funds • Portfolios of investment funds offered by investment advisors • Foreign UCITS

  4. Source: Own analysis based on data published by Polish Financial Supervision Authority

  5. Investment funds: share in WSE capitalization Value of stocks in funds portfolio % of capitalization of WSE Jan May Sept Jan May Sept Jan May Sept Jan May Sept Jan May Sept Jan Ma Sept Jan Value of stocks (mln PLN) Share in capitalization Source: FUNDonline FI. Analizy Online

  6. Foreign funds marketed in Poland • First notified in 2004; only UCITS • Barriers to enter (no nominee account structure allowed) • Slow growth and yet marginal share in total investments in funds and total savings of households • Notified UCITS ≠ marketed UCITS

  7. Foreign funds: marketing data Source: Own analysis based on data published by Polish Financial Supervision Authority

  8. Foreign funds: recent figures Source: FUNDonline FI. Analizy Online

  9. Distribution of funds and financial products • Distribution and advice (banks, investment firms, specialized investment advisors) • Own products (e.g. banks, insurance companies) • Products of external entities (e.g. banks, investment advisory firms, investment firms) • Advice and allocation (investment advisory firms, some banks) • Authorized distribution of investment products – investment funds • Distribution of insurance investment products • Cross-selling • Electronic fund platforms

  10. Investment funds’ distributors Source: Own analysis based on data published by Polish Financial Supervision Authority

  11. Investment funds’ distributors Source: Own analysis based on data published by Polish Financial Supervision Authority

  12. Pension funds • Legal framework • Act of 28 August 1997 on pension funds • Specific construction and limited investment scope • Growing assets of pension funds (2nd Pillar) • Growing role as market players (WSE) • Not yet significant investments abroad • Upcoming reform • Possibility to diversify risk exposure (more/less dynamic products) • More exposure to foreign markets

  13. Source: Own analysis based on data published by Polish Financial Supervision Authority

  14. Source: Pension Funds reports. Citi Investment Research/DM Banku Handlowego SA

  15. Structure of household savings Source: FUNDonline FI. Analizy Online

  16. Structure of household credits and deposits Source: Own analysis based on data published by Polish Financial Supervision Authority

  17. Currency structure of mortgage credits for households Source: Own analysis based on data published by Polish Financial Supervision Authority

  18. Demand for investment products • Banking deposits still most important • Increasing demand for investment funds and unit-link products • Growing markets • Good results of funds skillfully advertised • Lower interest rates • People better-off, more aware (information not risk) • Recent crisis on global markets • Withdrawals from funds, WSE and investment products • Return to banks (tempting interest rates) • Sophisticated products for more demanding investors (e.g. structured deposits, tailored investment funds)

  19. Prospects • Good economic prospects for Poland • High interest rates and recent crisis on stock exchanges – return to safe banking deposits • Good prospects for investment funds in longer time horizon – increased awareness of investors • Future of Individual Pension Accounts unsure (also in view of the tax reform) • Growing popularity of unit-linked products (life insurance + investment fund) • Warsaw Stock Exchange • Rich and diversified product offer • Functional changes (trading platform, length of session,…) *Source: „PulsBiznesu” no. 76/2008

  20. Magdalena.Jagodzinska@kbctfi.pl KBC Towarzystwo Funduszy Inwestycyjnych SA www.kbctfi.pl We belong to KBC Group www.kbc.com

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