For Investor`s Day, Ameriabank organized discussion on specifics of  Armenia`s pension system

ArmInfo.  For Investor's Day, Ameriabank hosted an event dedicated to Armenia's  pension system. The goal was to bring together people interested in  investing, allowing them to share ideas, nuances of portfolio  construction, exchange experiences, and promote the growth of an  investment culture.

Gurgen Ayvazyan, Chief Financial Markets Analyst at Ameriabank, spoke  to participants about the specifics of Armenia's pension system,  represented by two players - Amundi ACBA Asset Management and  C-Quadrat - including how funds are distributed, how to choose a  pension fund, and presented international experience.

A panel discussion followed with representatives of Armenia's pension  funds. Petros Margaryan, manager of the C-Quadrat pension funds,  noted that today the difference in return between funds with higher  and lower risk levels is relative. Since its inception (in November  2013 - Ed.), he noted, the lower-risk (conservative - Ed.) fund had  higher returns for seven years. However, over the past five years,  following the coronavirus and the outbreak of the war in Ukraine,  when international markets recovered, the returns of moderate- and  high-risk funds (balanced and consistently profitable - Ed.) have  increased. "Therefore, this difference has compensated. And now we  have a situation where all funds have similar returns," Margaryan  clarified.

He noted that exchange rate volatility has the greatest impact on  pension fund returns, as evidenced by research and stress tests. The  manager emphasized that aggressive growth should not be expected from  pension funds: "As a rule, they provide long-term stable and reliable  income." Touching on the situation in the capital market, Margaryan  noted that it has been developing at a fairly good pace in recent  years, which cannot be said for instruments, the choice of which is  still limited.

In turn, Hrayr Aslanyan, Deputy Executive Director and Fund Manager  at Amundi ACBA Asset Management, noted that a week before the start  of the war in Ukraine in 2022, after three years of working with the  European Bank for Reconstruction and Development (EBRD), a deal was  concluded to implement a hedging instrument to protect pension funds  from exchange rate fluctuations. "A week before the war, no one  expected the dram to strengthen so much against the dollar. We saw  the significant impact that exchange rates can have on pension funds.  The deal was not very large - $7 million, but our funds managed to  save money.I would like it to be larger, but this is the first deal,"  he said, adding that other similar deals followed, in particular with  the National Mortgage Company.

Regarding the capital market, Aslanyan noted that certain  developments have been observed over the past few years. In this  regard, he noted that several companies have already issued bonds. "I  hope that the number of stock and bond issuers will increase, and  it  will be possible to more effectively manage pension fund investments.  We have committed to developing these processes, and from 2014 to  this day, we have introduced several innovations to the market that  have contributed to increased management efficiency and the  diversification of real investments," he concluded.