The DPF is a defined contribution pension fund established in 1984 as a trust through a joint initiative between Debswana, Anglo American Corporation Botswana, and De Beers Prospecting Botswana with key investments in property, equity, bonds and alternatives.
In an update to members recently, DPF officials said the first quarter kicked off with positive market performance due to several factors, which helped the pension fund’s returns.
“The year started off on a high note as global financial markets generated a strong positive performance in the first quarter, despite numerous market risks materialising,” officials said. “Dwindling recession concerns, strong corporate earnings, declining inflation, and increased expectations of pauses in central bank hikes, contributed to positive market performance for the quarter.”
In the latter part of last year, pension funds such as the DPF had witnessed weakness in their returns as the global markets braced for a possible recession, triggered by a string of interest rate increases in major markets, as well as escalating inflation and geopolitical tensions arising from Russia’s invasion of Ukraine.
Tremors also returned in the latter part of the first quarter of the year.
“Concerns about the stability of the banking system spread from the United States to Europe, as Swiss Bank Credit Suisse also collapsed before its competitor, Union Bank of Switzerland bought it out in order to stabilise the banking sector,” the DPF stated.
Between January and March, star performers in the DPF’s portfolio included global equities where returns rose 12.73%, followed by African equities with returns of 9.5 percent. Emerging market equities, emerging market bonds, global property, global bonds, and global cash delivered strong performances in the quarter as well.
However, domestic assets provided tepid results for the quarter, with local equities and Botswana cash-producing returns of 2.25 percent and 2.07 percent respectively. Local bonds returned 0.61 percent while local property was in the negative at 0.07 percent. The Botswana Stock Exchange’s Domestic Companies Index rose by 2.9 percent in the first quarter of the year, with counters such as Standard Chartered leading the charge.
The worst-performing asset class for the quarter was Africa Private Equity which declined by -7.94 percent during the quarter.
Fund officials said overall, the returns on investments experienced during the quarter are in line with the DPF’s strategy in the allocation of risk around its member profile.
“During the period under review, returns remained consistent with Debswana Pension Fund’s Life Stage Models investment strategy; whereby the most aggressive Market Channel outperformed the most while the least aggressive Pensioner Channel registered relatively lower returns,” the brief revealed.
