In this newsletter:
Benchtest 05.2015: investment commentary; the dilemma created for UIMs; the all new Child Care and Protection Act; reviewing the purpose of a pension fund; quarterly ERS reporting in question and more...
In this newsletter we comment on the global investment markets; we comment on the dilemma that UIMs find themselves in; an overview of the all new Child Care & Protection Act; we examine what employers and trustees should aim to achieve with their pension fund; we report on the recent AGM of RFIN; we provide an update on Namfisa activities and we provide a number of links to interesting and relevant articles in various news media.
As always, your comment is welcome, so open a new mail and drop us a note!
Tilman Friedrich's Industry Forum
Benchtest Monthly 05.2015
In May the average prudential balanced portfolio returned -1.01% (Apr: 2.36%). Top performer is EMH Prescient (-0.38%); while Metropolitan (-1.41%) takes the bottom spot. For the 3 month period EMH Prescient takes top spot, outperforming the ‘average’ by roughly 2.1%. On the other end of the scale Momentum underperformed the ‘average’ by 1.4%.
Life remains interesting as the banal saying goes. Not too long ago we first heard about the ‘peak oil’ theory and were made to believe that from now on the supply of oil will start to decline. This was of course supported with scientific analyses of the largest oil producing areas in the world. On 14 June 2015, Moneyweb posted an article ‘the world is facing its longest oil glut in at least 3 decades', vividly underpinned with colourful graphs, of course. Just using another source, the picture looks quite different. ‘Energy Briefing: Global Crude Oil Demand & Supply’ by Yardeni Research, Inc shows that there are different measures that produce different results. Measuring demand and supply on a 12 month average, rather than a monthly basis, as the latter report does, is a more convincing reflection. This does not really support the story of a huge oil glut. In fact it shows that there is still a small short supply on a 12 month average basis, given though that the gap between demand and supply has declined.
A few years ago global media focused our attention on the life threatening ozone hole. Have you heard anything about this phenomenon recently? The last I heard, as recent as last week, is that the ozone hole has virtually disappeared. Nowadays the topic everyone talks about is climate change, caused by carbon emissions, and of course it is once again threatening the existence of mankind! I really became deeply troubled when I read this headline ‘A child borne today may live to see humanity’s end’. My goodness I thought to myself, I am O.K. but what about my grandchildren? Yes, the world is evidently experiencing climate change, just think how mild our current winter has been, so it can only go to support the apocalyptic prognoses that we are approaching the end of mankind. So do not worry to save up for retirement because you will not live to enjoy the fruit of your hard work!?
Well, what can we believe? Are we experiencing a media supported global strategy to unsettle mankind? Why do we experience an on-going war all around the Mediterranean? On the one side we are watching on-going wars waged for the sake of a better world, of good against evil of course - whichever side you take - that uproots millions of people and exposes them to untold hardship. At the same time we are witnessing European countries buckling under the siege of refugees uprooted in the war torn Middle East. Just a few years ago all these countries were peaceful. But in the eyes of some beholders, this was not the point. The point was that these did not have a democratic government, were ruled by oppressors and possessed weapons of mass destruction. Are the oppressed and democracy deprived better off today, would you want to be one of them? What has happened to our morals, if we support wars for the purpose of installing democracy, if we drag some leaders to the ICC for crimes against humanity while others of much greater relevance get away unscathed?
Now what does this have to do with investing and financial markets?
Read ‘Be on the winning side and keep out of the cross fire’ in part 6 of the Benchtest 05.2015 newsletter to find out how these and other developments impact on our investment views. Download it here...
The dilemma of unlisted investment managers
As the result of the stubborn insistence of the regulator that pension funds must comply with regulation 28 and 29, before it had registered and approved the first ‘wave of applications’ for approval of UIMs and SPVs, many funds were forced to choose between the first few entities approved, in an effort to comply with this statutory requirement by 1 July 2015. Entities who received their approval too late to still be considered by pension funds are now for all intents and purposes prevented from participating in the ‘first round’ of pension funds’ capital allocations to UIMs and SPVs, where it is unlikely that these funds will allocate further capital within the next year or more. For these UIMs and SPVs that have incurred significant costs and have gone through great trouble to obtain approval, this must border on ‘administrative injustice’ by the regulator!
Child Care and Protection Act promulgated
The Child Care and Protection Act, Act 3 of 2015 was promulgated in Gazette 5744 of 29 May 2015, to give effect to the United Nations Convention on the Rights of the Child, the African Charter on the Rights and Welfare of the Child and other international agreements binding on Namibia.
The Act will commence on a future date to be published by the Minister by notice in the Gazette. It provides for a penalty not exceeding N$ 50,000 or imprisonment not exceeding 10 years or both, for offences relating to abuse, neglect, abandonment or maintenance of a child. It also provides for the state paying a maintenance grant, a child disability grant and a foster parent grant, in an amount and frequency as determined by the Minister by regulation.
The Act aims to:
Once the Act commences the following laws will be amended:
Justine Shipanga elected to RFIN Board
RFS' Justine Shipanga has been elected to the Board of the Retirement Fund Institute of Namibia. at the RFIN AGM held on 10 June 2015.
Justine Shipanga joined RFS from Sanlam Investment Management Namibia at the beginning of May 2014. She holds a B Economics and a Post Graduate Diploma in Financial Planning and has completed a programme in investment analysis and portfolio management through Unisa. Justine takes responsibility for the technical services to a portfolio of participating employers in the Benchmark Retirement Fund, as well as a few private funds, and is also responsible for the Benchmark performance review.
Our congratulations go to her, and we are sure that she will make valuable contributions to the retirement fund industry.
Kai Friedrich's Administration Forum
Quarterly return – Q2 2015 due 30 July 2015?
As at 19 June the following SPV/UIMs are registered:
Read the detailed article by Liz Ryan on Linkedin, here...
Read the full article by Dr Travis Bradberry on Linkedin, here...