Strategy
The Fund’s primary purpose is to preserve and maximise superannuation benefits of its Members, through prudent investment management. The Fund’s investment strategy (Investment Strategy) guides the investment decisions of the Fund, with the guidance of KFM, as the Licenced Investment Manager (LIM) for the Fund.
The Fund’s objective is to provide an after-tax return of at least +2% per annum, above CPI, with no more than one (1) negative return, in five (5) years. The headline CPI for Papua New Guinea for 2018 was 4.1%.
Investment Portfolio Performance
The Fund’s investment portfolio, including the RSA and reserves, increased to approximately K7.68 billion, as at 31 December 2019, which represents a substantial increase from the prior year.
The increase in the portfolio was mainly due to investment income and was partially offset by net withdrawals from the Fund. The investment income is primarily attributable to dividend, rents, interest income, and variations in the value of international investments.
Composition of Investment as at 31 December 2019
| % HOLDINGS | ||
| Asset Class | 31-Dec-2018 | 31-Dec-2019 |
| Domestic Cash | 1.8 | 1.2 |
| Domestic Bonds – Short Term | 18.6 | 23.2 |
| Domestic Bonds – LongTerm | 23.4 | 22.8 |
| Domestic Equities | 10.9 | 10.4 |
| Domestic Unlisted Equities | 15.9 | 11.7 |
| Domestic Properties | 16.6 | 15.2 |
| International Cash | 1.5 | 3.8 |
| International Listed Equities | 11.3 | 11.7 |
| Total Portfolio | 100.0 | 100.0 |
