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According to GSIS President and General Manager Winston F. Garcia, a request to submit proposal will be farmed out this coming May 11 with the mandate to yield for the pension fund, at least, an average return of not lower than 7.5 percent. "The fund manager will have to give GSIS an asset return of not lower than 7.5 percent and limit the volatility to between 4.0 percent and 5.0 percent," disclosed Garcia. The mandate will be for a five-year contract, on the very least. "We will decide in a month’s time which investment bank submitted the best proposal, which will earn substantial return to GSIS," he said. The GSIS’ holdings of foreign denominated Philippine IOUs, otherwise known in the financial markets as ROPs, already, reached $ 1 billion mark, accumulated in a span of two years. Garcia explained the need for GSIS to diversify its investment profile inorder to obtain the best yield for future benefit payments of more than a million state workers. At present, the investment profile is "not limited to the 70-30 ratio" on government securities and equities. "Diversification of securities and equities is most desired. Our mix is not limited to 70-30 ration but is composed of investments that gave us an accrued return of as much as 11 percent," he said. GSIS has shown market savvy relative to its investment strategy. Just recently, it earned some P26 billion from the sale of its holdings in food and beverage conglomerate, San Miguel Corporation. The proceeds will again be used for investments "in areas that will provide us more returns," and, in turn, further inject additional cash for its reserve funds. Moving forward, Garcia intimated GSIS is preening its eyes on other possible investment outlets aside from fixed income securities and equities. "It could be in the property sector," dished out Garcia, though, refusing to provide additional and specific details. |
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