The Uniform Performance Report.
• Up until now, reporting has been left up to external parties who report performance figures without the context that is required.
• PenOp has taken up the responsibility to report performance in a way that is fair to all pension funds and provides much-needed context to the public in a way that allows them to make informed decisions.
What Do We Hope to Achieve?
• PenOp is looking to provide a world-class standard for performance reporting for pension funds. We are looking to set the standard for financial reporting, not just in the pension industry but across the financial market in Nigeria and beyond.
• We hope this will drive pension funds to focus more on long-term performance and invest more in the real sector.
Methodology
• PenOp will be using audited historical data including fund prices and net asset values for the computation of this report. The benchmarks have been computed in coordination with Bloomberg LP, the world’s premier business intelligence company to produce credible comparable benchmarks based on asset class weights.
The Benchmarks
The Benchmark is developed in combination with Bloomberg LP is a standard reference against which the investment performance of pension fund portfolio of assets can be measured. It provides a basis for evaluating how well the pension fund investments have performed.
The benchmarks are based on industry agreed suggestive asset class allocations(weights) for the different Retirement Saving Accounts (RSA) funds. These asset class weights are based factors such as regulation on asset class limits and what is attainable in the market.
Benchmark For Each asset Class.
• Listed Equities: NGX Pension Index
• Federal Government Bonds (FGN): Bloomberg Nigeria (BNGRI) Index
• Subnational & Corporate Bonds: BNGRI + 150BPS
• Eurobonds: Bloomberg Emerging Market Hard Currency Aggregate Index
• Domestic Money Market Securities: 364 Weighted Average Treasury Bills Rate
• Infrastructure Bonds: 10 Year FGN Bond Yield + 150BPS
• Infrastructure Equity: 3 Year Average CPI + 150BPS
• Private Equity: Africa Venture Capital Association (AVCA) Index
• Real Estate & Investment Trusts (REITS): 1 Year Average CPI
