Local pensions have enjoyed stellar performances despite COVID-19, as their local and international fund managers have been able to secure high returns from key asset classes such as equities in the Big Four of tech giants, Google (Alphabet), Amazon, Facebook (Meta), and Apple.
“Equally important domestic equities contributed positively to performance following a long period of slow growth,” DPF CEO, Gosego January said in an update to the fund’s 12,500 members.
She, however, said the ongoing challenges with national shutdowns in parts of Asia, and the rest of the world had led to a disruption in the supply of goods and services.
“We expect to see central banks raising key policy interest rates during 2022, which will lead to volatility in assets prices and a lower growth outlook for equities,” she said.
Last year, January said the pension fund’s ability to continue to grow and yield positive returns for members has been a result of a strong and resilient investment strategy. This is based on the Life Stage Model that was enacted by the fund and invests member funds based on an individual’s age and risk appetite.
The CEO said the DPF challenged itself by navigating new emerging and frontier markets such as China and Africa. She said the fund management team had explored a whole array of investment instruments that had deepened the portfolio by constructing a defensive portfolio that ensures sustainability while still enabling substantial growth.
“The fund continues to invest substantially in domestic instruments and additionally supports local talents such as new and emerging Batswana owned asset management firms to ensure skills transfer and development that will drive growth for the fund and the wider economy,” January said.
The pension fund has over the years made strides in driving DPF’s diversification strategy, to create a one-stop-shop for its members. January said the fund strategy is pinned on product diversification as it continues to offer products and services that are designed to not only meet the needs of its members but those of their families as well.
In 2021, DPF through Mmila Fund Administrators introduced Mmila Preservation Fund. The board approved the services of the Mmila beneficiary fund that is designed to ensure that upon a member’s demise their beneficiaries’ needs are cared for timelessly.
DPF’s growth in 2021 is in line with trends across the local pension funds, whose collective assets reached P117.6 billion in October, from P106 billion at the start of the year.
