The average 12-month annual return of Poland’s second-pillar pension funds (OFEs) plunged to 1.5% as of 31 March, according to the Polish Financial Supervision Authority (KNF).

This compared to the average gain of 27.8% recorded six months earlier, and 17.6% reported in March 2017.

The fall-off after last year’s record performance was largely due to the downturn on the Warsaw Stock Exchange (WSE), which saw its bull run end in the third week of January this year.

At the end of March the WSE’s benchmark WIG index had lost some 9% of its value since the start of the year, dragging down the value of the equity-weighted second pillar.

The MSCI Poland index was up 4.7% in dollar terms in the 12 months to the end of March, according to FE Analytics data. However, since the start of 2018 to the end of April the index lost 6.2%.

PZU Group’s OFE, known as Złota Jesień, gained 2.5% during the 12 months to the end of March, the strongest return recorded by any second-pillar fund. Pekao’s OFE ranked bottom with a 0.1% loss.

Three-year average returns edged down to 11.4%, from 12.9% 12 months earlier, the KNF reported. Five-year returns fell from 37.1% to 20.5%, while 10-year returns moved up from 42.9% to 51%.

The Polish broker Trigon estimated that equities accounted for 85.1% of pension funds’ portfolios at the end of March. More than three quarters of total portfoliows (77.8%) were invested in Polish-listed stock.

Net assets, according to the KNF, fell by 1.1% year-on-year in Polish zloty terms to PLN165.7bn (€39.4bn), and members by 2% to 16.1m.

Inflows in the first three months of the year totalled PLN798m, against PLN2.3bn transferred to the first pillar under the slider regime for members with 10 or fewer years left until retirement.

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