WASHINGTON, D.C. (March 31st, 2020)– The Trust Fund Committee of the Trust Fund for the People of the Federated States of Micronesia (the Fund) conducted its fiscal year 2020 (FY20) second quarter meeting on March 25th (EDT) and 26th (Pohnpei) via teleconference.
The meeting covered the Fund’s investment performance for the October-December 2019 quarter as well as a current market update given the COVID-19 pandemic and the effect on the Trust Fund as well as the global economy and financial markets.
For the October-December 2019 quarter, the Fund gained 5.78%, above the benchmark of 5.63%. The net asset value of the Fund was $765,686,436 as of 12/31/19. The Fund also received a scheduled contribution from the U.S. government of $33,809,600 on 10/1/19.
The Fund experienced the volatility of financial markets in late January to March as the effect of COVID-19 spread among economies and financial markets. As of the end of February, the Fund lost 4.8% for the month and was down -0.1% for fiscal year 2020 (10/1/19 – 9/30/20). The net asset value as of 2/29/20 was $723,219,548, preliminary and unaudited. As of 3/24/20, it is estimated the Fund declined about 13.0% from the start of the fiscal year (10/1/19). The Fund’s Investment Adviser, Mercer Investments, LLC, and the Committee are monitoring the Fund to ensure the asset allocation is in line with the long-term investment objectives of the Committee approved Investment Policy Statement.
The Committee approved the fiscal year 2019 Annual Report and reviewed the fiscal year 2019 audit. For fiscal year 2019, the Fund had a restricted fiduciary net position value of $689,471,966 as of 9/30/19 and a weighted annual rate of return of 3.2%. The Fund’s independent auditor, Baker Tilly, presented the annual audit document. The audit was conducted in accordance with U.S. Generally Accepted Accounting Standards (GAAS) and U.S. Generally Accepted Government Accounting Standards (GAGAS). No deficiencies, material weakness or noncompliance were identified according to these standards.
The next quarterly meeting will take place in late May or early June 2020.
As stated in Article III of the Agreement Between the Government of the United States of America and the Government of the Federated States of Micronesia Implementing Section 215 and Section 216 of the Compact, as Amended, Regarding a Trust Fund, the purpose of the Fund is to contribute to the economic advancement and long-term budgetary self-reliance of the Federated States of Micronesia by providing an annual source of revenue after fiscal year 2023. For more information on the Fund, visit the official website at https://fsmcfatf.com/.