What are the key features of Nambawan Super’s Investment Strategy?

(Thanks to Cathy from Central for this question)
If you have any questions, please send them to toktoksuper@nambawansuper.com.pg and we will answer them.
Nambawan Super has an endorsed process regarding how the Fund makes investment decisions with respect to assets of the Fund. This process is outlined in the Fund’s Investment Strategy. The Strategy has three key features:

1. Diversification,
2. Downside protection without using derivatives, and
3. Dynamic Asset Allocation

 

 

1. Diversification

The assets of Nambawan Super are strategically allocated after considering risk appetites and return goals of the Fund, into what is called the Strategic Asset Allocation (SAA).  The SAA is a percentage allocation of assets between differing asset classes.  As all investments do not always behave the same way at the same time, diversification of assets allows the Fund to “not have all its eggs in the one basket” and thereby smooths returns to Members.
 

2. Downside protection without using derivatives

In last month’s article, we revealed how International Investments did very well in 2017. Along with being diversified generally outside PNG, an additional benefit of the international portion of Nambawan Super’s investment portfolio, is this asset’s ability to resist risk on the downside of any negative market correction.  By design, these assets are not as volatile as general equities.
 

3. Dynamic Asset Allocation

In response to major changes in market conditions, Nambawan Super has the ability to adjust the long-term SAA whenever markets are mispriced. This rebalancing is often referred to as Dynamic Asset Allocation (DAA).  The DAA allows the Fund to hold more assets that are doing well, and less assets that are not.
Nambawan Super understands that the new world is uncertain and challenging, therefore, the Fund believes having an Investment Strategy that has these three key characteristics is important. This is why saving through superannuation, and indeed increasing voluntary contributions, is one of the best financial choices one can make.