ENPF INVESTMENT INCOME UP BY OVER 300%

MBABANE – The first quarter of the year saw a healthy quarter-on-quarter increase in investment income for the ENPF rising from E52 million in the previous quarter to E164 million.

According to the Ministry of Labour and Social Security’s first quarter report, this translated to an increase of over 300 per cent. According to the report, the substantial increase in investment income was largely attributable to fair value gains on financial assets driven by strong market performance in the quarter. It was reported that the Eswatini National Provident Funds’s (ENPF) total expenses incurred in managing investments amounted to E6.8 million (previous quarter: E4.2 million). The increase in investment management fees was reportedly due to higher assets under management reported for the quarter under review, which were 2.5 per cent higher than the prior quarter.

Investment fees are charged as a percentage of assets under management quarterly and or monthly. To contain these costs, the fund continued to strategically manage its asset allocation between listed and unlisted (in-house managed) portfolio allocation.  As part of the fund’s 2020-24 strategy, it invested in technological platforms and infrastructure aimed at enhancing member experience and improving service levels and turnaround times.

“We are beginning to see the benefits of our IT investment, with increased penetration and usage of digital channels and a reduction in certain expense line items such as printing and stationery and a reduction in personnel costs as headcount reduces through non-replacement and natural attrition. Total expenditure has been contained within the approved budget,” read the report in part. The report further indicated that during the period under review, two activities were undertaken; receipt of dividends of E5.2 million from the investment made in First National Bank of Eswatini in November last year as well as a whopping E16.18 million from the Industrial Development Company of Eswatini (IDCE).

Asset

It is worth noting that 43 per cent of ENPF’s investment portfolio is held through South African asset managers, while 8 per cent is held by an offshore asset manager and 49 per cent is held locally. Thirty seven per cent of the portfolio is local unlisted equity investments into various industries managed in-house through Board representation in the companies and 2 per cent is locally listed equity through the Eswatini Stock Exchange (ESE).

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