PNG’S SUPER GIANTS SEEK DIVERSITY OFFSHORE

PNG’S two major superannuation funds are performing strongly, but the managers are constantly reviewing both their investment strategies and operational practices. Ian Tarutia, Chief Executive of NASFUND, says 88 per cent of the members’ funds are in domestic investments, the remainder offshore.

‘We have a strategy to invest some of our funds offshore to ensure that there’s better diversification of our investment portfolio, and to ensure that we have the opportunity to liquidate the portfolio as required to pay members’ dues when they need to become available.

‘We’ve got a strategic asset allocation which says: “These are the asset classes that we should be investing in and these are the expected returns.”

‘For example: fixed income, shares, listed/unlisted, loans, properties and so forth. There have been tactical moves in between those asset classes. What we have done is shift away from low yielding cash deposits, and into higher earning Treasury bills.’

The former Chief Executive of Nambawan Super, Garry Tunstall, said Nambawan will also be looking to diversify offshore. He said the fund had changed its strategic asset allocation to 75 per cent onshore and 25 per cent offshore. The previous allocation was 15 per cent offshore. Getting the additional 10 per cent allocation offshore was, however, affected by the foreign exchange shortages. Nambawan, according to Tunstall, is looking to increase its emphasis on income rather than capital gains. The emphasis will be on ‘real income’ from earnings, rather than ‘income by valuation’. He said the fund’s average return over the last ten years has been about 9.9 per cent.

Tarutia says government bonds are ‘paying well and truly above’ the yields on the property portfolio. Treasury bills are currently providing a seven per cent return, well above international equivalents.

Ian Tarutia, CEO of NASFUND says the fund is diversifying.