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Modest increase in HSF

The trinidad Guardian / The Heritage and Stabilisation Fund (HSF), which was valued at US$5,533.4 million on October 1, 2014, increased modestly to US$5,655.4 million by September 30, 2015, registering an increase of just 2.47 per cent.

Fund chairman Dr Ralph Henry said this was well below its performance as in the previous year it grew by 7.65 per cent.

“Behind this lower return, there was an underlying volatility in the market place. Indeed, the asset valuation of the Fund increased over the first two quarters of the financial year, and stood at US$5,779.4 million at the end of March 2015, but declined over the next two quarters,” he said in the HSF’s 2015 annual report which has just been released by the Ministry of Finance.

Dr Henry added: “Significantly, throughout the entire year, the Fund outperformed its composite benchmark, and, even in decline, performed better by registering decreases lower than the benchmark.

The chairman, in his assessment of the fund’s performance, said in September 2014, the Finance Minister based Government’s expected revenues for fiscal year 2014/2015 on a projected oil price of US$80 per barrel. However, there was the start of “an inexorable decline in energy prices during the course of the year” and they never reached a level requiring placements by the Government to the HSF.

Dr Henry said the asset valuation of the HSF increased over the first two quarters of the financial year, and stood at US$5,779.4 million at the end of March 2015, but declined over the next two quarters.

He added: “Significantly, throughout the entire year, the Fund outperformed its composite benchmark, and, even in decline, performed better by registering decreases lower than the benchmark.”

He said three major issues engaged the attention of fund-managers during the year. They were the date at which the US Federal Reserve Bank would implement a change in its policy of quantitative easing, and in triggering an increase in interest rates; the fiscal crisis of the Greek Government and the treatment of its debt within the European Union; and the weak performance in the European economies along with the slowing of economic growth in China and among the other BRICs, in the global trading system.

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