- Fund assets value stood at P10.4bn in Q3 of 2023
- Performance anchored by the domestic assets
Debswana Pension Fund (DPF) assets dropped slightly to P10.43 billion in the third quarter (Q3) of 2023 from P10.53 billion a quarter earlier on subdued growth in global markets, according to an internal DPF document.
The slippage comes after a buoyant market performance at the start of the year, then a global downturn in investment recorded between July and September 2023 impacted DPF pension assets value, the report said.
“Global Equities endured declines in the quarter due to high-sustained interest rates, weak corporate earnings, slowing growth, a bearish economic outlook, decreased investor confidence amidst sector rotation, and geopolitical tensions,”.
It noted that the growth for the quarter under review was underpinned by Domestic Assets particularly, Botswana Equities and Botswana Bonds. The fund further stated that the equity markets had a positive performance for the quarter driven by mining, tourism, financials, consumer staples, and brewery sectors.
“The domestic bond market similarly generated positive results, spurred by increased government auctions and a rise in the yield curve,”.
“Global investor sentiment in the third quarter was generally cautious and risk-averse, and this was evident in the negative performance across most offshore asset classes,” added the diversified fund.
Also, DPF has said elevated inflation was a dominant theme in the quarter, driven by strong demand, geo-political tensions, supply chain disruptions, rising energy prices, wage growth, and housing costs. Inflation in the United States was 3.7 percent in September 2023, 0.7 percent higher than June 2023, further moving away from the Fed’s 2 percent target.
Commenting on the portfolio performance, DPF said the worst-performing Asset Class for the quarter was African Equities which fell 6.22 percent.
However, it said on a 12-month basis, the Fund generated positive returns net of investment fees. According to the DPF, during the 12-month period, the Market Channel delivered 17.59 percent, while the Conservative Channel rose 15.93 percent and the Pensioner Channel generated 14.78 percent.
“During the period under review, the returns remained consistent with Debswana Pension Fund’s Life Stage Model’s investment strategy, whereby the most aggressive Market Channel has outperformed the most while the least aggressive Pensioner Channel registered relatively lower returns,” DPF underscored. DPF is the second-largest pension fund by assets. It manages the assets of the members who are employees of Debswana and De Beers Group respectively.