One of the latest innovations in the asset management sector – the target income funds of Pioneer Investments, is already on the market;

A growing number of young people have started putting aside small amounts of money for pension in a voluntary pension fund.

The Bulgarian is more and more often looking for alternative forms of savings and investments. This is one of the main conclusions in the latest analysis of UniCredit Bulbank. The reason lies in the trend for gradual decrease of deposit interests not only in Bulgaria but in Europe as well. As at the end of August the attracted funds in banks reach almost BGN 41 billion, with a slower growth rate compared to the previous years.

“As one of the most innovative banks in the market, we are always ready to offer our clients the best solutions. The expectations are that alternative forms of savings will become more and more attractive in the years to come, as there is a growing number of people looking for ways to ensure their future in terms of finance and independence”, said UniCredit Bulbank CEO Levon Hampartzoumian.

Tsvetanka Mincheva, Director of Retail Banking at UniCredit Bulbank explained that the purpose of alternative forms of savings is to preserve and increase the value of money over time in the best risk/return ratio.

Tsvetanka Mincheva added that “despite the significant change in the trend and more customers going in this direction, they are still a small percentage of the people with standard savings in banks”.

Around 74% of UniCredit Bulbank’s customers investing money in mutual funds are aged over 45 years. At the same time the number of young people putting aside small sums of money into an additional pension fund has increased – 72% of those customers are up to 45 years old. The majority of them are married and have a mortgage loan. The average monthly installment which people make on their lots in additional pension funds is BGN 78. The savings life insurances are preferred both by the younger customers (aged 31-45), and by the middle-aged customers (aged 46-60).

“The increase of gross proceeds from the social security contributions of the population into voluntary pension funds is by 77% for the first half of 2015 compared to a year ago, clearly shows the change in people’s way of thinking. These are signs of improvement in people’s financial culture towards a greater diversification of savings”, Tsvetanka Mincheva further explained. The life insurance market in the country has increased by nearly 24% for one year compared to the same period of 2014, with a raised premium income of BGN 52.6 million.

In response to the market change and to ensure advice with high added value, UniCredit Bulbank offers its customers the Save Smart Programme. Through it everyone who seeks a long-term strategy for their savings, depending on the purpose, risk profile, age and other factors, will be able to distribute their money among mutual funds, life insurances, voluntary pension funds and deposits.

For the mass customer, the most accessible way to avail of the benefits of capital markets is by investing small equal monthly installments in the so called savings plans. The Pioneer savings plans offered in the branch network of UniCredit Bulbank have in two years doubled the number of customers who chose them as a way to put aside small amounts of money on a monthly basis. It is an interesting fact that the most active ones are the customers between 33 and 57 years old, who start to think of how to increase their savings so that in the long run and most of all after retirement to have their own source of financial independence.

“Through a regular instalment plan one can buy a bigger number of shares for an average price. At the same time this mitigates risk and ensures a good return”, commented Krum Aleksiev, Head of Marketing and Segments at UniCredit Bulbank.

From this week on customers will be able to use also one of the latest innovations in the asset management industry – the target income funds of Pioneer Investments. This is a new philosophy of investing, in which dividends from the investment in mutual funds are paid two or four times a year. The dividend and the period are determined at the beginning of each year. For example for 2015 the target set for the subfund European Equity Target Income is 7%, and for the subfund Global Multi Asset Target Income – 5% income.

The average annual income from a savings plan in a balanced portfolio is 7.7% a year for a period of 15 years. The conservative portfolio of the people who chose an investment in equal monthly installments brings a return of 4.9% p.a. for the same period. For comparison, with the low-risk investment in government securities or bonds, the income would not go beyond 1.5%.

*This text is not a recommendation for making an investment decision.

Further information for clients:

UniCredit Bulbank, Call Centre

Phone number: 0700 1 84 84

More information for media:

UniCredit Bulbank, Identity & Communications Department

Viktoria Blajeva, Phone: + 359 2 9264 993, wjlj/ebwjepwbAvojdsfejuhspvq/ch

Magdalena Ivanova, Phone: + 359 2 9232 528, nbhebmfob/jwbopwbAvojdsfejuhspvq/ch