The Fondo de Ahorro de Panama Announces Consolidated Annual Financial Results for 2015 and Key Management Initiatives
Panama | March 31, 2016
The Fondo de Ahorro de Panama, Panama’s sovereign wealth fund, (hereinafter the "Fund") announces its consolidated annual financial results for 2015 and key management initiatives.
The Fund’s net assets ending the year 2015 totaled USD 1.225 billion, 4.8% lower when compared to the 2014 period, as a result of lower market value of investments and the distribution of USD 57.4 million in net income to the National Treasury corresponding to 2014. Since becoming operational in 2013, the Fund has transferred USD 69 million to the National Treasury.
For the period 2015, the Fund generated interest and dividend income in the order of USD 24.4 million, slightly lower than in the same period in 2014 (USD 25.8 million). From an income (interests and dividends) and net realized gain perspective, which was USD 11.4 million, the Fund generated USD 35.8 million for the year. Un-realized losses in the portfolio amounted to USD 36.4 million (2014: USD -3.9 million). Taken as whole, the Fund closed the year with a gross return of -0.04%; net income came in at a negative USD 4.0 million. (Financial statements are here, in Spanish.)
he Fund’s financial results for 2015, largely reflect the performance of the established benchmarks in the Fund. Notably, the performance of the associated portfolios – managed by external asset managers – in the Fund exceeded (on a weighted basis) that of their established benchmarks by 15 basis points (in managing the portfolios, such managers are restricted from deviating significantly from the established benchmarks). Throughout 2015, the performance of the benchmarks, and therefore our total portfolio, was affected by several factors that included heightened volatility primarily as a result of divergent monetary policies (especially in developed economies), coupled with the uncertainty around rate increases by the US Federal Reserve towards year-end, the performance of the Chinese and other emerging economies, and lower commodity prices, especially that of crude oil. Despite the fluctuations in asset pricing valuations experienced in 2015, the management of the Fund remained prudent and long term (100% of fixed income assets are invested in securities that are rated “investment grade”).
Key Management Initiatives and Goals
In 2015, we focused primarily on:
- The development and implementation of the Fund’s investment policies, which establish the economic and financial management of our national savings.
- Program development of the Fund’s long-term investments, which includes the Annual Investment Plan and Strategic Asset Allocation.
- The adoption of the legal framework that would enable us to carry out an effective and transparent selection of professional services providers to the Fund.
For 2016/2017, based on our long-term Strategic Plan, management will focus on: (1) promoting the growth of the Fund; (2) implementing and monitoring the Annual Investment Plan; (3) implementing management processes for global fund administration and custody; (4) strengthening our adherence to international best practices for sovereign wealth funds; (5) integrating the development and professional growth of human capital; and (6) adopting and enhancing our risk management culture. All of the above with the aim of safeguarding the long-term value of the fund, under changing economic and financial contexts, for future generations of Panamanians.
About the Fondo de Ahorro de Panama
The Fund was created by Law 38 of June 5, 2012, whose main objectives are:
- Establish a long-term savings mechanism for the Panamanian State; and
- Establish a stabilization mechanism in case of a state of emergency (declared by the Cabinet’s Council) and economic slowdowns.
Contact: Administration, +507-394-5776/5706, firstname.lastname@example.org
For additional information visit www.fondoahorropanama.com