PALIKIR, Pohnpei—The unaudited Fiscal Year (FY) 2020 reports for both the Federated States of Micronesia’s (FSM) sovereign Trust Fund (FSM Trust Fund), as well as the Trust Fund for the People of the FSM (Compact Trust Fund) show that both Trust Funds grew in FY 2020, despite the market volatility resulting from the crisis posed by the COVID-19 Pandemic.
“Our FSM Trust Fund and Compact Trust Fund, combined, the amount is $1,087,400,000 (1.08 billion dollars),” His Excellency David W. Panuelo, President of the FSM, said in a statement. “Our canoe’s destination has always been self-reliance, and we are doing everything we can to keep our Nation financially secure beyond 2023 and far into the future.”
The FSM Trust Fund saw its total assets increase from $266,900,000 (266.9 million dollars) in FY 2019 to $307,300,000 (307.3 million dollars) at the end of FY 2020. The $40,400,000 (40.4 million dollars) increase reflects direct contributions of $17,300,000 (17.3 million dollars) from Congress appropriations and investment gains of $23,100,000 (23.1 million dollars). The investment returns include dividends, interest, and market value appreciations, and are net of all fees and expenses. The FSM Trust Fund had an annual rate of investment return of 8.6% for FY 2020, net of all fees and expenses.
The Compact Trust Fund, which was developed bilaterally between the FSM and the United States of America via the Compact of Free Association, as Amended, saw its total unaudited assets increase to $780,100,000 (780.1 million dollars) at the end of FY 2020. The Compact Trust Fund had an annual rate of investment return of 7.9% for FY 2020.
In a recent meeting with the FSM Trust Fund’s advisors, President Panuelo requested that the FSM Trust Fund purposefully seek to evaluate the potential impact to the portfolio’s sustainable growth from risks introduced by Climate Change, and to ensure that the Nation’s sovereign wealth fund’s investments in overseas private sector entities support the FSM’s vision of a sustainable, clean, and prosperous natural environment. This environmental-aware and green economy-conscious investment philosophy is commonly known as sustainable investment.
“It is only common sense that a Nation that champions environmental stewardship ensure that its long-term financial security be grounded in environmentally-friendly investments,” President Panuelo said.
In reflecting on the significant growth of the FSM Trust Fund as well as the vision of environmental leadership projected by President Panuelo, the Honorable Eugene Amor, Secretary of the Department of Finance and Administration, expressed his gratitude to the strong support from the FSM leadership and added: “I also want to thank our investment advisor Wilshire Associates for its work in guiding the Trust Fund’s efforts of growing responsibly. In the new fiscal year, the Trust Fund will focus on further aligning its investments with [President Panuelo’s] vision of a sustainable future. We will also seek to share our approach with the entire Pacific community.”