Pension assets near P110bn

The value of assets held by local pension funds reached P109.9 billion in April, continuing the strong performance witnessed since the beginning of 2020. Bank of Botswana figures released this week show that the pension fund assets are maintaining the robust growth seen when they passed the P100 billion mark for the first time in history last November. Local asset managers say the performance has been possible despite COVID-19 causing chaos in the global market due to active investment in high return stocks and jurisdictions. Under current rules, local pension funds are required to hold a minimum of 30% of their assets locally, although momentum is gathering within the government to raise the threshold to 70%. As at April, P71.6 billion of local pension funds or about 65.1% of the total, were invested offshore and data trends show this is where much of the growth has been in recent months. The 65.1% represents the highest proportion of pension funds held offshore since August 2020. Asset managers such as BIFM have said the high performance of Big Tech stocks such as Google, Apple and Amazon have helped defy market uncertainties brought on by the coronavirus (COVID-19). The central bank’s figures show that the value of offshore assets held by pension funds rose by about P10 billion last year, and within that offshore equities were the main source of growth. The value of offshore equities held by pension funds rose from P52.8 billion in January 2021 to P56.5 billion in April, while local equities sank from P12.7 billion to P12 billion over the same period.