Participants in the personal pension system closely follow the new developments and investment opportunities related to BES. Although it is a long-term investment tool, those who invest their money in BES want to earn a lot. For this reason, pension fund returns are of great importance to participants. “There is no return to BES this year, we cannot achieve the returns of previous years, savings are melting too, what should we do?” Answers to questions like: Hürriyet’s Noyan Doğan wrote an article on BES returns. Here is Doğan’s post …
Since the beginning of the year, the average return of BES has been 22.20%. If we take into account that inflation, that is the CPI, was 35.64 per cent from the beginning of the year until June 15; The return of BES is 13.44 points behind inflation. Over the same period, those who invested their savings in interest-bearing funds earned 20.39%, while those who invested in interest-free funds earned 27.65%. As a result, those who preferred interest-free funds got a return of 15.25 points below inflation and those who preferred interest-free funds 7.99 points below inflation. In the first half, we can say that the yield of interest-free funds is relatively better than interest-free funds.
HIGH INCOME ON EQUITY FUNDS
This is the average yield of the BES I’m talking about. Let’s take a look at the returns by fund. For example, the savings of those who prefer equity funds have increased by 37.5 percent since the beginning of the year, which means a return of about 2 percentage points above inflation. Those who invested their savings in gold funds, on the other hand, got a 31% return, about 5 points below the inflation rate. Aside from equity funds, there is no other fund since the beginning of the year that has provided returns above inflation. For example, the yields on interest-bearing money market funds were 7%, 29 points below inflation. Indeed, it can be seen that the savings of those who invest their savings in the money market, external public debt and variable funds have eroded considerably since the beginning of the year.
STATE OF OTHER INVESTMENT INSTRUMENTS
Let’s take a look at the average returns of other investment instruments since the beginning of the year. For example, those who invested their savings in deposits achieved a return of 7.24%. The interest yield on deposits remained 28.4 points below the inflation rate, in other words, savings melted severely. Those who favored gold got a 30.73% return, which is about 5 points below inflation. Those who prefer the dollar, on the other hand, achieved a return of 29.47 per cent since the beginning of the year; The dollar yield was 6 percentage points behind inflation. The BIST 100 index has also remained 0.68 points below inflation since the beginning of the year, offering its investors a return of 35%. With a clearer explanation; In the first half of the year, the yields of all investment instruments, including the BES, remained below the rate of inflation, but those who chose funds suitable for market conditions, such as stocks and gold, were relatively more advantageous in the PPS.
RECOMMENDATIONS TO PARTICIPANTS
In summary, the performance of BES in the first half of the year is not good, compared to previous years, it is not good at all. For example, in 2021, PPS participants achieved a return of 44%, 9 percentage points above inflation, and the gold fund return broke a record with 67%. Likewise, a similar situation prevailed in 2020; The average return on BES funds was 26%, 12 percentage points above inflation, and the savings of those who favored gold and foreign exchange weighted funds increased between 35 and 55%.
So where do we end up at the end of all this? First; Since the PPS is a long-term savings tool, it would not be fair to expect much higher returns on inflation each year. However, in my view, a return of 3-4 points above inflation will be achieved at the end of the year. The latter; It would not be fair to expect high returns from PPS in a market where the returns of all investment instruments are below inflation. So what do you do? First of all, it is necessary to change the funds in which savings are valued based on market conditions. I’m not saying to change it every month, but in such environments, changes can be made at least once every three months. In this regard, you can get support from the pension companies; because companies can now provide investment advice.