Nambawan Super CEO, Paul Sayer, said the Fund’s investment team is keeping a close eye on investment performance as it is preparing for an expected increase in exits from the Fund in 2020.
“We are anticipating higher outgoing payments than the K546 million paid in 2019, however this is related to both Covid-19 and Public Sector reforms.
“Our investment team have focused on liquidity, and are holding higher cash reserves (note no cash is held at branches) to ensure members have funds available when needed.
When asked if the Fund expected to deliver a negative return Mr Sayer said he believed 2020 is going to be a tough year for the Fund, but that it is too early to call.
“Some investment markets have shown negative results earlier in 2020, but are already showing signs of turning around.
“Our team is looking for opportunities improve the returns from investments and to claw back impacts from the rapid down turn.
“How quickly the country and global economies start showing improvements in economic activity and investment returns from this point will determine the end result.”
“Last week, we were pleased with the Bank of South Pacific (BSP) announcement that the Fund would receive a dividend of more than K55 million.
“This is down on the year before, but is welcome cash flow in 2020, which has been a tough year to date.”
Mr Sayer reminded members that superannuation is a long term investment, and fluctuations in returns from year-to-year are expected.
“Under the excellent regulatory environment embedded since 2002, PNG Superannuation Funds have enjoyed 20 years of growth.
“Nambawan Super manages a diverse and balanced portfolio of investments.
“Members may not know that Nambawan Super operates an investment portfolio with the risk of a negative return in 4 out of 20 years, and yet Nambawan Super members have enjoyed 20 years of positive returns.
“During this tough economic climate we continue to manage the fund to maximize returns within this risk tolerance.
Mr Sayer said if Nambawan Super, does make a loss in 2020, it is not due to poor management or poor regulation, but the perfect storm of poor local economic conditions coupled with a biggest global economic downturn in 100 years.
“We must trust that we are investing for the long term and at times we must hold our nerve and wait for the eventual market recoveries that we know do occur,” he said