Pension funds push total assets under management to ¢30.58 billion – Bank of Ghana’s report

The Bank of Ghana’s Financial Stability 2020 Report has revealed that the total Assets Under Management (AUM) saw a significant growth in 2020 as a result of an increase in pension funds.

At the end of 2020, it stood at ¢30.58 billion, a growth of 8.04% from the previous year, compared to a decline of 0.01% in 2019.

Total Assets Under Management at end 2020 was made up of Pension Funds (¢22.26 billion), Collective Investment Schemes (GH¢3.14 billion) and other funds (GH¢5.18 billion) managed by fund managers. The growth of 8.04% in AUM was due to a 24.10% increase in pension funds despite a negative growth in both Collective Investment Schemes and discretionary funds.

The report said the negative growth in other funds and CIS could be attributed to reduced investor confidence arising from the revocation of the licenses of 53 fund management companies that could not honour redemption requests of investors.

Foreign investor holdings of debt instruments broadly unchanged

Meanwhile, the value of debt security holdings held by foreign investors remained broadly unchanged during the period under review, in contrast to the value of foreign investor equity holdings, which declined.

Foreign investors debt holdings stood at ¢28.8 billion at the end of December 2020, as compared to ¢29.1 billion in December 2019.

In contrast, the value of foreign investors equity holdings decreased to ¢4.82 billion at the end of December 2020, from ¢5.94 billion in December 2019.

The report said the decrease in the value of foreign investors’ equity holdings was attributable to declines in the price of equities in the domestic market, arising from uncertainties regarding the impact of the Covid-19 pandemic on the domestic economy.

It is expected that the value of equity holdings by foreign investors would rebound as the domestic economy recovers from the COVID-19 pandemic in 2021.