The Trust Fund Committee of the Trust Fund for the People of the Republic of the Marshall Islands (the Fund) conducted its fiscal year 2020 (FY20) third quarter meeting on June 2nd (EDT) and 3rd (Majuro) via videoconference.
The meeting covered the Fund’s investment performance for the January-March 2020 quarter as well as a current market update given the COVID-19 pandemic and the effect on the Fund as well as the global economy and financial markets.
For the January-March 2020 quarter, the Fund lost 14.95%, above the benchmark of -16.19%. The net asset value of the Fund was $417,902,045, preliminary and unaudited, as of 3/31/20. The loss was due to the financial and economic disruptions caused by the COVID-19 pandemic. During the quarter, the Fund received a contribution of $5 million on 2/19/20 that, in accordance with Section 216(b) of the Amended Compact, was recorded as an RMI government contribution. This contribution was for a compensatory adjustment for the adverse financial and economic impact resulting from the effect of Title IV of the Compact of Free Association Act of 1986 upon Title Two of the Compact, consistent with the Compact of Free Association Act of 1986, and its successor, the Compact of Free Association Amendments Act of 2003. The Fund also received a contribution from Taiwan in the amount of $2.4 million on 4/24/20.
The Fund recovered in April with a gain 7.32% for the month. For the fiscal year to date (as of 10/1/19), the Fund was down 2.38% and ended the month with a net asset value of $450,894,119, preliminary and unaudited.
The Committee reviewed and approved adjustments to the Investment Policy Statement to guide the asset allocation, including adding updated capital market assumptions. The Committee approved a service proposal from the Fund’s auditor, Baker Tilly LLC, to conduct the audits for fiscal years 2020, 2021 and 2022. The Committee also noted the status of the distribution policy and other Trust Fund issues post-2023, including noting the current status of bilateral negotiations between the governments of the United States and the Republic of the Marshall Islands.
The next quarterly meeting will take place in late August or early September 2020.