The investment portfolio of the Unemployment Insurance Fund (UIF) surpassed the benchmark by returning 12.34% versus the benchmark’s 12.15% in the 12-month period.
The fund said in a statement issued: Wednesday that its investment committee recently met with the Public Investment Corporation (PIC) to obtain a report on the performance of the fund’s investment portfolio june 30, 2022.
“The performance was achieved despite withdrawals from funds to support the Temporary Employer/Employer Relief Scheme (TERS),” the UIF said. “TERS was introduced to mitigate the impact of COVID-19 by compensating employees and employers whose incomes were reduced due to the continued lockdown.”
Since April 2020, UIF has paid out over R61 billion to over 267 000 firms and approximately 5.4 million employees through the intervention of COVID-19 TERS.
The fund said it will continue till all pending claims are resolved.
In addition to TERS, the UIF implemented the Workers Affected by Unrest (WABU) Relief Scheme, which provided financial assistance to workers affected by social unrest in parts of KwaZulu-Natal and Gauteng in July 2021.
About 15,000 employees of the affected provinces have received Rs 19 million through this program.
UIF also emphasized that positive investment performance would allow it to continue paying all customary benefits to its members, including unemployment, parenting and adoption payments.
In his economic forecasting as asset manager of UIF, PIC stated that the portfolio is still exposed to external risks.
In this regard, it informed the fund that despite recent portfolio performance, global market volatility remains significant despite initial pullbacks since early 2022.
Other anticipated downside risks include the potential for a sharp rise in the US yield curve on the back of rising global inflation (driven by rising energy and food prices), which could act as a headwind for equity markets, and the prospect of a recession. Growing potential in the US and other major economies.
In addition to continued uncertainty over additional COVID-19 infection waves, other risks include the duration of the shutdown and the resulting economic impact, which could impact market performance.
“PIC recognizes that some of the earlier investments made by the Fund are underperforming or are in financial difficulties, especially in unlisted portfolios.
“PIC continues to take corrective measures, such as transition initiatives or legal recovery measures, to ensure the fund’s performance is sustainable and the overall portfolio continues to grow,” UIF said.
As part of following the recommendations of the MPTI Inquiry Commission, forensic examination is now being conducted on the transactions listed in the commission’s report, the PIC informed the UIF.
PIC has also implemented a number of measures to improve governance within the organization, such as enhancing investment processes and on-board monitoring of investment options.
“PIC is committed to continuing the implementation of the Fund’s investment mandate to ensure the Fund’s growth, stability and ability to fulfill its statutory duties to pay employee benefits on time.”
The fund’s mandate is diversified across multiple asset classes, such as inflation-linked bonds, listed stocks (both domestic and international), cash and money markets, socially responsible investing and developmental investing (DI).