Panama SWF Approves its Annual Investment Plan by Reducing Global Fixed Income
Posted on 01/24/2022
The Board of Directors of the Fondo de Ahorro de Panama had a board meeting and approved its Annual Investment Plan for the 2021/2022 period, which establishes the Strategic Asset Allocation and defines the Strategic Portfolio of the fund.
The expected Allocation (maximum limits) by asset classes of the Fund’s Strategic Portfolio is as follows:
Short-Term Investments/Cash: 31%
Global Fixed Income: 40%
Inflation-linked Bonds: 4%
Global Equities: 20%
Alternatives Investments (private equity): 5%
Source: FAP.
According to the media release, “Relative to the previously approved portfolio (2020/2021), the current Strategic Portfolio reflects a reduction in its global fixed income allocation, an unchanged allocation in global equities, and an increase in its short-term/cash allocation. For alternatives investments (private equity), the 5% allocation is expected to progressively reach that limit over the course of a few years.
The Plan is structured with strict adherence to economic/financial reasoning and applicable legal standards, considering key criteria such as the Fund´s 1) objectives and investment horizon; 2) liquidity needs; 3) capital preservation 4) diversification; and 5) risk tolerance.
In accordance with its bylaws, the Board must approve the Plan and the Allocation annually. Additionally, the Board may consider a tactical asset allocation change in the portfolio in response to unexpected changes in the financial markets conditions, and in furtherance of protecting the assets of Fund.”
Keywords: Fondo de Ahorro de Panama (FAP).