Last month we outlined key features of Nambawan Super’s Investment Strategy. This month we look at the assets that contribute to the Fund achieving the return objective of Consumer Price Index + 2%.
The process of investing is a journey. At Nambawan Super having, a robust Investment Strategy assist’s the Fund to chart a clear course.
The process begins with having a written plan. This identifies objectives and constraints to assist the Fund to construct the overall investment portfolio. This portfolio then identifies the different asset classes and their targets. The common asset classes are as follows:
- Fixed Income,
- Property, and
- Listed Equity
- Unlisted Equity
- Cash – Assets that are the most liquid are short dated, and earn a minimal income. E.g. Cash at bank and Term Deposits. As a result of the nature of this asset class, it is a transit asset used for liquidity or represents funds waiting to be deployed to the other assets.
- Fixed Income – Assets that are longer dated than cash and provide fixed earnings over their life, thus, the name “Fixed Income”. E.g. Government Bonds and Loans.
- Property – Real estate assets that generate primary income called “Rent”. Types of properties include; commercial, industrial, and residential, amongst others.
- Listed Equity – Ownership in companies that are publically listed on a stock exchange. The ownership is in the form of a “share or stock”. Shares are part of a company, and for each share you own in a company; you are entitled to a portion of the company’s profits and can have a say in big company decisions. E.g. BSP shares listed on the Port Moresby Stock Exchange.
- Unlisted Equity – Almost identical characteristics to the listed equity, except with one key difference. The shares are not listed on a public exchange.
After defining these assets, the next step is the allocation and the process of selecting which investments to buy. This will be covered next month.
Nambawan Super understands that investing is a journey and takes time, having an Investment Strategy that has certain features, covers these assets and allocated appropriately, the Fund will continue to grow member’s funds for a journey after retirement.
If you have any questions, please send them to firstname.lastname@example.org and we will answer them.