Monday, May 15, 2017 9:00 AM / Quantitative Financial Analytics
APT Pension Fund Managers hit another home run in April by recording the highest monthly return in both the RSA and Retiree fund category of pension funds. It will be recalled that the APT RSA and Retiree funds toped the performance chart for the first quarter of 2017 with 3.77% and 4.56% returns respectively.
Performance analysis by Quantitative Financial Analytics shows that APT pension funds returned 5.63% and 6.11% on its RSA and Retiree funds for the first 4 months of 2017 yielding an annualized return of 18.13% and 19.78% for the RSA and Retiree funds. Though the funds had impressive returns for the month, the returns were short of outperforming the NSE Pension index which generated a 5.93% return for April, but on a YTD basis, APT pensions left the index biting the dust.
The APT RSA which has about 114,304 registered clients invests mostly in fixed income securities. Analysis reveals that the fund allocated 37% of its assets to FGN Bonds, 28% to Treasury bills, 10% to corporate bonds, and 9% to money market instruments. With 12% allocated to equities and 1.35% to private equities, the fund further hedges against stock market risk by allocating 2% of its assets to state bonds, 0.74% on overnight cash as well as at 0.42% to mutual funds.
The Retiree fund’s assets are almost all allocated to fixed income securities with only 8% and 2% in equities and cash on call respectively. The fund manager whose aim is to “invest funds safely and profitably in line with PenCom’s guidelines” aims to preserve the capital of RSA holders in real terms and exceed the risk-free rate of return while adhering to statutory requirements. When asked what the secret to the successes achieved by the funds is, Mr. Godwin Evoh noted that it has something to do with the asset allocation strategy of the fund manager.
The current performance is in line with previous performance of the funds. In 2016, APT RSA returned 12.58% while the Retiree fund brought home 14.99%. If things continue the way they are, the funds are sure to beat their 2016 performance, we are watching!