Palau’s COFA Trust Fund lost $34.7 million in the 1st Qtr. of 2022 based on the Trust Fund’s 2022 Q1 Comparative Performance Analysis Report on March 31, 2022. The Fund’s beginning market value of $331,173,273 dropped to $296,450,878 as a result of a net investment loss of -24,722,396 and a withdrawal of -10,000,000.
Losses occurred in International Equity, Fixed Income, and Alternative Investments allocations of the Fund portfolios although still within the investment policy range.
US Equity allocation did well in March compared to others and is expected to continue to do well with more confidence expressed by the Fund Report stating “better profitability” and “resilient US economy”.
“We see limited risk of recession over the next 12 months. The robust labor market, strong consumer spending, and elevated capital expenditures should continue to support above-trend growth in 2022. However, the longer the crisis in Ukraine lasts, the more downside risk there is to the US economy as elevated food & gasoline prices will be a headwind for consumer spending going forward.” States the Report.
US Federal Reserve rate hike, rising inflation, Russia’s invasion of Ukraine, and rising COVID cases in China are expected to continue to impact the global economy, and therefore the COFA investments in the coming 12 months. (By: L.N. Reklai)