Investment plan

Panama SWF approves its annual investment plan by reducing global fixed income

Published on 01/24/2022

The board of Fondo de Ahorro de Panama met and approved its annual investment plan for the period 2021/2022, which establishes the strategic asset allocation and defines the fund’s strategic portfolio.

The planned allocation (maximum limits) by asset class of the Fund’s strategic portfolio is as follows:

Short-term investments/liquidity: 31%

Global Fixed Income: 40%

Inflation-linked bonds: 4%

Global Equities: 20%

Alternative investments (private equity): 5%
Source: FAP.

According to the press release, “compared to the previously approved portfolio (2020/2021), the current strategic portfolio reflects a reduction in its global allocation to fixed income securities, an unchanged allocation to global equities and an increase in its short-term share. term/cash allocation For alternative investments (private equity), the 5% allocation should gradually reach this limit over the course of a few years.

The Plan is structured in strict compliance with economic/financial reasoning and applicable legal standards, taking into account key criteria such as 1) the Fund’s objectives and investment horizon; 2) liquidity needs; 3) preservation of capital 4) diversification; and 5) risk tolerance.

In accordance with its bylaws, the board must annually approve the plan and the award. In addition, the Board may consider tactically changing the asset allocation in the portfolio in response to unexpected changes in financial market conditions and in order to protect the assets of the Fund.

Keywords: Fondo de Ahorro de Panama (FAP).