Feel most free to forward this email newsletter to fellow APS participants and pensioners!
 
Sign up here for our quarterly newsletter if you are not yet a direct recipient.
 

Dear APS participant or Pensioner,

As a member of our pension fund, you have a right to know what happens to your monthly pension contributions. At APS, we make it our top priority to make sensible investments that generate returns to pay out pensions now and in the future. Also, we find it important to keep you updated on our investment results. In this newsletter, we will highlight our local portfolio, following our previous newsletter about local investments (March 2021).

International performance since 2011

Over the now nearly 10-year life span of the international investment portfolio, APS has gained +$100,697,411.00or an average of +8.66% per year since the inception of the pension fund in 2011. This net performance is among the highest for all government pension funds in the Caribbean with a similar asset allocation. 

Overall, the APS international investment portfolio continues to perform well. On February 28th, 2021, the market value of the international investment portfolio was $180,270,803.00 USD. The chart below shows the growth of APS’ international investment portfolio:


 

What are our investment choices based on?

The 60/40 CBCS Rule
The 60/40 Central Bank of Curacao and Sint Maarten rule states that approximately 40% of our funds can be invested internationally. The remaining 60% has to be invested locally (in Sint Maarten and/or Curaçao).



Our Investment policy
To ensure that APS makes the best possible investment choices, APS must comply with the rules incorporated in the Master Investment Policy Statement (MIPS).
 
To make sure our investments generate good returns, we invest in adequately secured products with established, financially stable firms and projects. Determining if an investment is viable, is done by performing a thorough due diligence that can be described in general by the following key steps: 

1 Initial Review: does the investment fit into APS’ vision and investment policy? 
2 Financial Review: does the investment adhere to our risk/reward policy?
3 Legal Review: does the investment comply with our legal requirements? 
4 Investment Committee Advice: a secondary review which includes an independent analysis plus advice of the investment. 
5 Decision by Board.
 
Every investment opportunity must pass each of the above steps in the order from 1 through 5 before it can be included in our portfolio.  

Diversification

Diversification is very important for a pension fund. To lower risk, we diversify as much as possible. Simply put: we don’t put all of our eggs in one basket.

 

Currently, the largest part of our international investments is allocated to the large cap segment, meaning companies with a market value of more than $10 billion, such as Amazon and Microsoft, because they tend to be more stable in times of international crises.  Also, more investments have been directed towards growth stocks* and U.S. companies and not in non-U.S. companies because those markets have been performing better. However, depending on economic and financial market conditions, weightings can change over time.
 
Stocks or Bonds?
The asset allocation of the APS international investment portfolio has changed over time to meet the challenges of the evolving global economic and financial markets. When the Fund was initiated in 2011, interest rates were much higher on bonds and bank deposits, however, since 2008 and through the COVID-19 pandemic, ultra-low interest rates have prevailed, which led APS to invest more in stocks. The charts below show the trend of APS’ international investment portfolio’s stock/bond asset allocation: