RETIREMENT FUNDS RECORD 4.52% GROWTH IN ASSETS

MBABANE - As at the end of June 2024, retirement funds’ assets showed a 4.52 per cent growth, increasing from E47.94 billion in Q1 2024 to E50.12 billion in Q2 2024. On a year-on-year basis, a growth rate of 11.60 per cent was observed from E44.89 billion. The upward trend in asset growth was fuelled by improved performance in the financial markets in South Africa and internationally. It is worth noting that in terms of market share, statutory funds comprising of Public Service Pensions Fund (PSPF), Eswatini National Provident Fund (ENPF), MOPADO PF and DC MOPADO PF control 82.99 per cent of the total industry assets.

Assets invested domestically increased by 4.65 per cent on a quarterly basis from E22.53 billion to reach E23.58 billion at the end of June of 2024. Yearly comparison showed a 10.98 per cent growth from E21.24 billion. The value of the foreign asset holding increased from E25.41 billion in Q1 2024 to reach E26.53 billion in Q2 2024, indicating a 4.41 per cent increase. Year-on-year, the assets grew by 12.16 per cent from E23.65 billion.

Retirement funds are subject to the Retirement Funds Act of 2005 and the Retirement Fund Regulations of 2008, which prescribe the maximum investment limits applicable across the different asset allocations. As at the end of Q2 2024, the sector’s assets continued to be concentrated in two asset classes with a long-term investment outlook in line with the need to match the sector’s long-term liabilities.

Equities and debt maturing after 12 months totalled E41.61 billion, constituting 83.05 per cent of the total retirement funds assets. The allocation in equities stood at 61.69 per cent which was 0.89 percentage points lower than the 62.58 per cent recorded in Q1 2024. About E10.70 billion, translating to 21.63 per cent of the retirement funds’ assets were invested in debt maturing after 12 months as at the end of June 2024.

Investments

As of June 2024, the retirement funds’ local asset holding was valued at E23.58 billion, an increase of 4.65 per cent compared to last quarter. Year-on-year, the local assets were up 10.98 per cent. This increase was due to a 3.57 per cent increase in the value of longer-term debt as a result of the new investments in the issued corporate and government bonds. There was also a 13.37 per cent increase in shorter-term debt holdings in the local economy. The sector’s investments in equities declined by 0.59 per cent from E5.99 billion in March 2024 to E5.96 billion in June 2024 due to a slight drop in the Eswatini Stock Exchange (ESE) All-Share Index.

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