The ECB’s monetary policy continues to be based on low interest rates, which will certainly change with the growing inflationary pressures we have witnessed in recent months. Despite low interest rates, the deposits of bank customers in Slovenia are still growing in both households and companies. According to the Bank of Slovenia, households had deposits of EUR 23,0 billion at the end of May 2021 and increased by EUR 0,6 billion in 2021 alone, while companies had deposits of EUR 8,5 billion at the end of May 2021. funding increased by almost EUR 0,5 billion in 2021. This increase in funds can be attributed to the element of prudence and security, which is strongly rooted in Slovenians, who are very careful in consumption and investment.
The structure of savings in banks has also changed recently, as there are fewer and fewer time deposits, and the available balances on transaction accounts are accumulating. Savers are waiting for the right moment for other forms of investment or they simply do not know where to put their savings. Additional uncertainty is caused by the already mentioned inflationary pressures, which are the result of rising prices of mainly raw materials and materials and the economic recovery, which will affect the negative real returns on such investments. In May 2021, the monthly price growth rate in Slovenia was 0.9%, while at the annual rate inflation was 2.1%. Inflation reduces the value of money in real terms and, consequently, real returns are also lower, and in the case of a bank deposit, the return in the observed period is realistically negative. Let’s also look at the investment real estate market, where flats for rent on average achieve an annual return of between 3-5%. It is known that in the period of higher inflation, investments in raw materials, especially gold, are appropriate, but recently, due to easier accessibility, it has become a speculative investment with significant fluctuations. Real investment, which includes real estate, is also one of the options for hedging against inflation, but the liquidity aspect needs to be highlighted, as real estate investment is poorly liquid in the short term. Depending on the situation in the real estate market and the financial condition of the investor, a sale with a loss may happen soon, there may be problems with tenants and a few months of non-leasing the property, there is no diversification of investment and the dependence on investment is significant. At a time of increased inflation, the prices of both real estate and rents are rising, but the question is to what extent the increase in such prices will be tolerated by the Slovenian real estate market and whether we are not at the upper limit at the moment.
However, it is advisable to invest in alternative forms of investment, which include real estate and infrastructure funds, purchase of receivables and other investments. Less known are investments or funds that repurchase receivables in their investment policy. It is necessary to distinguish between receivables from companies and those from individuals, as the former are much riskier in terms of possible deterioration of corporate liquidity than receivables from individuals, which are in lower amounts and individuals guarantee with all their assets. In addition, such receivables are mostly insured with insurance companies, which further minimizes the risk. Superos Fund Management Ltd. manages the alternative investment fund Superos Stability Fund, which, according to its investment policy, invests the assets of well-informed investors exclusively in receivables from natural persons who are at the same time Slovenian citizens. The investment in this fund is diversified and consequently less risky, while achieving a significantly higher annual return.
