K&H Securities: what could be an alternative to inflation-tracking government securities?

By: Trademagazin Date: 2025. 01. 17. 10:01

The retail savings market is in an exceptional situation: since the interest rate on inflation-tracking government securities will decrease in the near future, and the previously high yields will be paid out in the first months of 2025, those affected can expect to see a nearly 20 percent increase, announced K&H Értékpapír, which also described the options available to savers.

A reorganization is expected in the Hungarian investment market.

“Many savers will have to decide what to do with their savings in inflation-tracking Hungarian government securities, since they were able to achieve a return of almost 20 percent as a result of inflation in 2023, essentially risk-free. At the same time, due to the slowing inflation in 2024, the yield on the affected securities will decrease significantly, which is why many people are now looking for alternative investment opportunities,”

– said István Horváth, Managing Director of K&H Értékpapír.

One-third, one-quarter, one-quarter

The brokerage firm conducted a survey among its own clients with stock market investments to find out what they are doing now.

“Around 2,200 clients have responded to the digitally available survey so far. A third of the respondents (28.2%) were not affected by the question because they do not have any government securities investments, a quarter of those surveyed (24.7%) do not plan to change, meaning they will keep their government securities even with the lower yield. However, a further 25.9 percent are mostly turning to ETFs, listed shares, other government securities and investment funds,”

István Horváth presented the results. According to him, a high risk tolerance can be observed among K&H Securities clients, which is also why some of them are interested in ETFs and listed shares.