PNG’S SU­PER GI­ANTS SEEK DI­VER­SITY OFF­SHORE

Business Advantage Papua New Guinea - - Financial Services -

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.

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